Twin Cities businesses brace for cost hikes tied to tariffs

CBS News

3 hours ago

How the trade war is impacting energy costs for Minnesota businesses
How the trade war is impacting energy costs for Minnesota businesses
How the trade war is impacting energy costs for Minnesota businesses
An important conversation is underway in London that could impact everyone. Top U.S. and Chinese officials are negotiating tariffs.
When it comes to the trade war, one cost that hits all of us is the cost of energy.
On Monday, the temperature outside Minnesota Ice in St. Paul was around 60 degrees. Inside the facility, it was 20 degrees, which takes a lot of energy.
"The two biggest costs we have are power and water," Mark Lawson with Minnesota Ice said.
The business makes ice for convenience stores, craft cocktails and the Eagan Ice Maze.
"The wonder that ice can bring is something that you really wouldn't expect," Lawson said.
Something else he didn't expect was the rising cost of power.
"It is steadily growing," he said.
And that's on top of pending tariffs, and some that are in place for aluminum and steel.
"We operate on very low margins, and these might not hit us for six months, but we have to keep the lights on, so we will just have to raise the cost of our product, which you don't want to do. Nobody wants that," Lawson said.
Minnesota Ice isn't the only local business that's hoping things will cool down.
"The way we and the industry see it, we are walking off a cliff," Michael Allen, CEO of All Energy Solar in St. Paul, said.
Michael's Industry is solar energy. He's worried about 50% tariff increases on metals they use to make solar panels and proposed federal cuts that would take away rebates for families to go solar, as part of President Trump's so-called "Big, Beautiful Bill."
"I predict a significant slowdown in the industry. I predict a lost increase for consumers who want to do this product," Allen said.
A statement from the White House insists that tariffs work and can be an effective tool for achieving economic and strategic objectives.
As the White House adjusts its strategy, Allen says the industry will have to adjust prices.
"We have to anticipate that there's going to be an increased cost. Just to do the exact same thing we're doing today, it will be expensive tomorrow," he said.
As for the cost of power bills, there hasn't been much of a jump over the past year.
Recent numbers show the average price in Minnesota is $14.62 per kilowatt hour, or about $60 per month for an average home. That's below the national average.