Uncertainty looms large for Minnesota businesses amid ICE surge
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Words like “disruption,” “upheaval” and “radical uncertainty” have become practically synonymous with Minnesota these past few weeks.
While it’s too early to draw firm, data-driven conclusions, no one is going out on a limb by saying the combination of turbulence and uncertainty will exact an economic price on the state.
Just ask Tomme Beevas, owner of the Jamaican themed Pimento restaurant on Nicollet Avenue in Minneapolis.
“Business owners are afraid. Guests are afraid. Employees are afraid,” he said.
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“How do you have an employee born in New York afraid to come to work? How do you have a Native American employee afraid to come to work? How do you have guests who are afraid to come into the city to support even their favorite businesses?”
Pimento is a block and a half from where Alex Pretti was shot and killed by federal agents. The restaurant is a haven for people in the neighborhood and for those honoring Pretti’s life at the nearby makeshift memorial. The bathrooms are open to the public and anyone can come in off the street and relax without purchasing anything.
That said, the restaurant has bills to pay.
Like so many small businesses in much of Minnesota, especially in the Twin Cities and surrounding suburbs, employees are too afraid to show up for work. They worry about being detained and harassed on their commute.
“We had legal immigrant staff and we lost 75 percent of my kitchen,” said Michael Wilson, executive culinary director for the Pimento restaurants. “Salaried employees have been having to work a lot more.”
We met in the early afternoon, and Wilson said he had been pitching in, washing dishes, since 6:30 that morning.
A raft of uncertainties
The economic uncertainty in Minnesota extends beyond immigration enforcement. For one, there are trade disruptions from President Trump’s tariffs.
With a new governor coming in and the state elections for House and Senate control a tossup, it could be hard for businesses to know which combination of spending reductions and tax increases will emerge from legislative sessions this spring and next.
Perhaps most important are concerns about the short- and longer-term effects on the labor market from the immigration crackdown, according to Louis Johnston, professor of economics at the College of St. Benedict and St. John’s University.
“The main source of labor force growth in Minnesota has been either the immigrant population or families of first-generation immigrants,” he said.
Losing that source of labor presents big challenges.
Taken altogether, the range of policy and economic unknowns run deeper than usual.
The radical uncertainty weighs heavily on risk-taking decisions by business owners and management. “The amount of possible outcomes get so big that you can't plan for them, or it's difficult to plan for them, and so you need to just hold tight rather than coming up with new things,” said Johnston.
In other words, the rational response by business owners and executive leadership is to hedge against multiplying unknowns by taking fewer risks. The business terms of the moment, “caution” and “wait and see,” are appropriate.
In practice, it means conserving cash and resources.
“A business might postpone making decisions about investment or hiring, and that maybe they'll have to forego some profit, potentially profitable opportunity as a result,” said Laura Kalambokidis, former Minnesota state economist.
Now a professor in the Department of Applied Economics at the University of Minnesota and its extension service, she added that downsized ambitions are “a cost to the economy. But businesses have to insure against policy risk.”
The difficulty of finding labor today
Alex Gebru, owner of A1 Tree and Stump Removal, is navigating his company through multiple risks. His company, along with some 1,300 other Minnesota firms, recently lost their federal Disadvantaged Business Enterprise certification.
The Trump Administration wants them to reapply and explain why they qualify as disadvantaged without mentioning gender or race. He hasn’t bothered.
A first-generation immigrant from Ethiopia who said he’s been stopped by ICE in recent weeks, he’s sympathetic to employees and contractors who don’t show up. But there is an economic cost.
“It's really, really hard to find good labor,” he said. “It was always an issue, but now it's just even harder.”
Case in point: Gebru is developing a property he bought in east Saint Paul. It will be a mix of affordable housing and warehousing for his tree company. Progress is slow.
“As the actual work goes on the development side, you know, a lot of the contractors are immigrants, and it's hard to get them to come outside right now,” he said. “I think it definitely slows a lot of things down.”
Little wonder that he sees uncertainty in the economy right now. And there’s little doubt that the uncertainty tax will take its toll on Minnesota’s economic dynamism.
Possible buffers
However, the local impact may be muted or accentuated by how the national economy performs in 2026.
“We have a diverse economy, an economy that is diverse with regard to industries, and it tends not to have a lot of state specific risk economically,” said Kalambokidis. “Our risks are often external, coming from the U.S. economy.”
The remarkable resilience of Minnesota’s small business community also complicates the picture — in a good way.
For instance, despite the turmoil, Pimento’s Tomme Beevas is looking ahead to better days and continuing to grow the business.
“We can't imagine a city where there's no Vietnamese food, no Chinese food, no tacos, no jerk chicken,” he said. “We don't want to be the land of bland, and thankfully, we need to keep these ethnic businesses — immigrant businesses — going so we can have a more vibrant place to live, work and play.”
Entrepreneurs are optimists by definition, said Gebru, which may help explain why not only mostly hires second chance employees, but why he can’t help but search for business growth opportunities this year.
He plans on finding “folks that want to do business with us” and share the “values that we have.”
“For 2026 I'm still optimistic. There's still good people in the world and we're still going to show up,” he said.
Showing up matters when it comes to business and the economy.
Among the many economic and policy uncertainties weighing on Minnesota right now is the certainty that its small business community, especially its immigrant entrepreneurs, are looking for their next opportunity.
Correction (Feb. 6, 2026): Alex Gebru’s name was misspelled in a previous version of this story, it has been corrected.
