Wisconsin export values have fallen billions in the past decade. Tariffs may make it worse

Yahoo

01-05-2025

Rising prices and shrinking manufacturing jobs could be on the horizon for Wisconsin consumers and workers, as the state's exports industry continues declining billions of dollars in value, according to a new report by the Wisconsin Policy Forum.
After a 2012 peak, the value of Wisconsin exports have been steadily decreasing for more than a decade, the report said.. Between 2012 and 2024, Wisconsin exports dropped from $32 billion to $27.5 billion, or more than 8%, in value.
Adding further uncertainty to the industry are President Donald Trump's sweeping tariffs against Wisconsin's top trading partners.
The Trump administration has said boosting American manufacturing is a central goal of its tariffs. But, in the short term, the tariffs could take a further toll on the state's already-declining exports — and, by extension, a toll on Wisconsin's manufacturing industry, which relies heavily on exports and accounts for more than 18% of the state's private-sector jobs.
Meanwhile, Wisconsin Republicans have largely praised the president's tariffs and dismissed questions about Congressional oversight over the policies. In March, Sen. Ron Johnson expressed concerns over how tariffs may impact Wisconsin industries, but he voted with the rest of the Wisconsin Republican delegation on April 30 to shoot down a resolution that would have pushed back against tariffs.
Here's why the value of Wisconsin exports are dropping and which parts of the state have been most affected.
Though Wisconsin export values have recovered from a pandemic drop, the industry has been steadily declining since the early 2010s, the report found.
Between 2013 and 2024, Wisconsin's share of total U.S. exports fell from 1.5% to 1.3%. In the last two years alone, the value of state exports has slipped by $2 billion.
"It's a continuation of this long-term shift in the United States, especially in the upper Midwest, away from manufacturing," Tyler Byrnes, a senior research associate for the Wisconsin Policy Forum, said of the decline.
In the past few decades, American companies have steadily moved production overseas in search of cheaper labor — though there are some promising signs in Wisconsin of manufacturing returning home. In particular, high-skilled manufacturing has stuck around while other industries have declined, Byrnes said.
"There's been a shift toward making more high-value things that take a lot of skill and highly skilled labor to produce, like agriculture and mining equipment," he said.
In 2024, Wisconsin's two largest export industries were industrial and electrical machinery, and together comprised nearly $11 billion, or more than 39% of the state's total exports.
Though the value of Milwaukee's exports have dipped significantly in the past decade, the city still remains Wisconsin's top exporting region by far.
In 2023, Milwaukee exports were valued at $9.7 billion — a more than 19% decline from a decade earlier, when adjusted for inflation. Still, Milwaukee fared better than some of its peer metros, which saw even steeper declines: a 38% drop in Pittsburgh and 32% in Cleveland and the Twin Cities, according to the deport.
Between 2008 and 2023, several smaller Wisconsin metro areas also saw steep export declines. In particular, Green Bay logged a drop in processed foods, paper, and machinery exports, and Appleton exported fewer computer and paper products.
However, it's not the same story statewide. Madison and Racine have seen their export values grow 0.6% and 5.8%, respectively, over the past decade (in inflation-adjusted values). Between 2013 and 2023, the two cities have traded off taking the title of second-largest exporting region in the state.
As of 2023, Racine's exports were valued at $3.7 billion and Madison's at $2.9 billion.
In general, Byrnes said Wisconsin smaller export markets, like Sheboygan and Eau Claire, help stabilize the state even when major exporters close up shop in other cities.
"Wisconsin tends to have a little bit more distribution of population and economic activity," he added. "Exports are definitely important in Milwaukee and Madison and Racine, but there are other communities across the state that are a little smaller but also depend on export markets."
Wisconsin businesses export goods to nearly 200 countries, but the leading destinations of these exports have remained the same over the last decade: Canada, the European Union, Mexico and China. Together, those four regions import about two-thirds of all Wisconsin exports, according to the report.
But the Trump administration's tariffs could shake up the longstanding stability of these trade relationships.
As of May 1, the U.S. is tariffing all Chinese goods at 145%, certain Canadian and Mexican goods at 25%, and all EU goods at 10%. In turn, all these trading partners have implemented retaliatory tariffs on American goods.
The retaliatory tariffs lead foreign importers to shift from buying Wisconsin-made products to a cheaper, non-tariffed alternative, Byrnes said. For exports like mining equipment, worth millions of dollars, a 20% tariffs is a significant price hike.
Even the uncertainty of flip-flopping U.S. tariffs could scare importers away, Byrnes said. In April, Oconomowoc manufacturer Sentry Equipment Corp. lost a major order to a Chinese customer because of the country's retaliatory tax on American-made goods.
"Imagine you're trying to make a multimillion dollar investment, and you're not sure what the price is going to look like in a few months because you don't know what the tariffs will look," he said. "That could directly impact Wisconsin's competitiveness on the international market."
Tariffs also raise the cost of imports into the U.S., which means instability for domestic manufacturers that rely on parts from other countries, such as steel from Canada. Wisconsin-based ABC Supply Co., a roofing supplier, is the latest company to raise prices to make up for increased raw material costs from tariffs.
Though the Trump administration has said bolstering American manufacturing is one of its key goals, the U.S.'s labor shortages make it difficult to ramp up production domestically, Byrnes said. And Wisconsin, like other states, relies heavily on immigrant labor, but the Trump administration has accelerated deportations and slashed migrant visas in recent months.
Even if companies choose to move production back home, building new factories take significant time and money, so these effects of the tariffs will not be felt for years, Byrnes said. In fact, in 2018, Harley-Davidson actually began shifting production overseas in response to the first Trump administration's tariffs.
"Over the long term, there may be benefits," Byrnes said, "but over the short term, there's disruption."
More: China tariffs pose opportunities for Wisconsin manufacturers, but it's complicated.
More: Sentry Equipment scrambles to recover from lost export order to Chinese customer
This article originally appeared on Milwaukee Journal Sentinel: How Trump tariffs will affect Wisconsin's declining export industry