By rssfeeds-admin 
June 12, 2025
A new report from the Dakota Institute for Business and Economic Analysis gives an in-depth look at what South Dakotan imports and exports — and how those relationships could be affected by tariffs.
Applying current effective tariff rates suggests roughly $296 million in added import costs for the state, rising to $370 million if Chinese tariffs revert to 145 percent, according to the institute’s quarterly Dakota Outlook publication.
Dakota Institute is a nonprofit with a social entrepreneurship business model. Revenue from business consulting funds the operation and public benefits such as research and analysis.
A report authored by
Annual data from 2008 to 2024 shows that South Dakota exports and imports declined following the Great Recession, then gradually increased until 2020.
“From 2020 to 2022, South Dakota saw a significant surge in trade, with imports rising from $1.3 billion to $1.9 billion and exports increasing from $1.4 billion to $2.4 billion,” it said. “However, after 2022, South Dakota experienced a slight decline in trade, with exports decreasing by 12 percent in 2024 compared to the previous year.”
Canada, China and Brazil were the state’s most significant sources of imports in 2024, with Canada leading at $639 million, followed by China at $257 million and Brazil at $256 million, according to the report. On the export side, Canada remained South Dakota’s most considerable trading partner, receiving $955 million in exports, followed by Mexico at $419 million and China at $153 million.
Top S.D. imports
South Dakotans largely purchase goods from other countries that are tied to the agricultural and ranching sectors, including machinery, chemicals and fertilizer.
“Tariffs on these goods could significantly increase the cost for South Dakota’s farmers and ranchers, raising operational expenses,” the report said.
“Since these industries rely on these imports to maintain productivity, any disruptions in their availability or price could reduce profit margins and make it harder for producers to remain competitive in both national and global markets. Given the state’s dependence on agriculture, tariffs on critical imports could have a broad impact on the local economy, potentially hindering the growth of the agricultural sector.”
Exports also are dominated by agriculture-related products. The market for those is affected by the value of the dollar in addition to tariffs. The escalation of retaliatory tariffs with China, for instance, “poses serious risks to South Dakota’s export sectors — particularly processed meats, grains and animal feeds — by eroding their price advantage abroad and threatening revenue streams for producers across the state,” the report said.
In Smithfield Foods’ most recent earnings report in late April, the company, which has a large Sioux Falls operation, spoke to the initial tariff impacts. At the time, there was a 145 percent tariff rate in effect with China that hadn’t yet been temporarily reduced to 32 percent.
“With China no longer essentially being available, we have really had to pivot our business,” president and CEO Shane Smith said.
“What we’ve built over the last few years is really a lot of different levers in fresh pork that we can pull. So we are able to ebb and flow with different markets. For us, China represents in total about 3 percent of our revenue. And so while it’s important, we do believe we have other options.”
The company “fully expected this tariff interruption as we came into 2025,” said Donovan Owens, president of Smithfield’s fresh pork segment.
The company is focused on its domestic fresh pork segment and higher-value fresh pork items, as well as its diversified international markets, he said.
“We understand and we’ve talked a lot about China. It seems to be a continuing topic, but we’ve got 30 other export markets we sell to,” Owens said.
“We do believe and we hope that things will continue to work and progress to a settlement there, but if it does not, we’ve got a strategy to mitigate and to improve our sales and to use our next best sales strategy to pretty much mitigate as much as we can from the China aspect. And we’ve got to remember, too, that we are one component in this, and we are a large component, but everybody faces the same China struggles that we do.”
It’s important to recognize that the exceptionally high 145 percent tariff rate — or even the paused rate of 32 percent — on Chinese imports “may not materialize at full scale,” according to the Dakota Outlook report.
“Such steep tariffs could render many products economically unviable, forcing importers to either absorb costs or seek alternative supply chains. In practice, businesses are likely to respond by diversifying suppliers, shifting away from heavily tariffed goods or renegotiating sourcing contracts, which could mitigate the actual tariff burden.”
The worst-case scenario is projected to be $82 million in added annual costs for Chinese imports to South Dakota, the report said.
“In practice, many businesses are expected to adapt by modifying their sourcing strategies, switching to alternative suppliers or implementing supply chain adjustments that can reduce the actual tariff burden,” it said. “In addition, future trade deals could lower this estimate.”
To view the full Dakota Outlook report, visit here.
The post New report details S.D’s international trade relationships, potential tariff impact appeared first on SiouxFalls.Business.
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