Jodi’s Journal: Trade wars abroad start hitting home as downturn appears inevitable

May 11, 2025

Do you feel optimistic about the economy in the next six months?

What about the next year?

Or maybe two years?

The question was posed to a business gathering in New York City about a week ago, and not many hands went up. Hardly any for six months. A smattering as time extended.

So I asked the same question of the Downtown Sioux Falls Rotary Club this past week, as part of a panel discussion on business conditions in Sioux Falls.

Six months? Maybe 20 percent of the crowd.

A year from now? At least one-third.

Two years from now? More than half.

It’s not surprising, in a room regularly filled with civic pride and a history of business success, that there would be confidence in Sioux Falls’ ability to weather whatever economic headwinds lie ahead, as we’ve done time and again.

But it’s important to remember that as we’ve grown, our exposure to outside factors has too. And the latest economic twist is going to be a unique one to attempt to weather.

This week, we’ll bring you a story I’ve waited on for a few weeks in hopes of more clarity around the changing approach to U.S. trade. Absent that, I started talking to business owners about the impacts they’re already feeling — which are significant and could become more so.

As I told the Downtown Rotary group, I am concerned about many industries and businesses, including small, locally owned ones that rely on imported merchandise.

I talked with businesses that sell home products, kitchen equipment, toys and clothing, and the message was the same: Their prices are going up, their supply chain is uncertain at best, and they’re unnerved about what the future might hold.

Even if a trade deal with China emerges soon, brace yourself for impacts, because manufacturing essentially has been shut down there for the last month and the number of containers crossing the ocean has dwindled.

There will be price hikes, product shortages and some businesses that can’t make it — even assuming things restart somewhat soon.

If you’re in the service sector, you have exposure too. If you lend to or insure the agriculture industry, for instance, your clients likely are facing a double-whammy of reduced foreign markets and rising costs for equipment.

All that said, we do need more favorable trade agreements. I just hope our community rallies as it always has to support our own when the cost to do so goes up more than we might expect.

One of the toughest things in business is to have the guts to invest in the future when times are down. If that collective opportunity arises for this community, we need to take it.

We have a persistent shortage of workers. If other places around the country begin to experience layoffs — and even if we do — we need to double down on recruiting talent to this community to serve us when the economy rebounds. At the same time, we need to recognize that the emerging world demands lifelong learners who can upskill as industry requires. We need to create an educational infrastructure that not only supports young people with a range of adaptive programs but allows for a mature workforce to easily retrain as needed.

At the same time, we need to continue positioning ourselves as a location where industries of the future can thrive: fintech, cybersecurity, high-value manufacturing, agribusiness and biotech.

Economic downturns always create opportunities and winners, even though it’s easy to focus on those who can’t navigate them. I’m still fairly optimistic this could be a decent year of development for Sioux Falls. It’s up to us to do what we can to ensure our longstanding businesses are able to weather whatever lies ahead.

Talk about a decade of disruption. Can you believe we’re only halfway through it?

Jodi’s Journal: Call centers, cost savings and the prison paradox

The post Jodi’s Journal: Trade wars abroad start hitting home as downturn appears inevitable appeared first on SiouxFalls.Business.