Upper Midwest leaders navigate the region’s uncertain economic future
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Business leaders and policymakers discussed immigration’s relationship with labor force growth, data centers’ evolving role in the Upper Midwest, and how tariff strategy will impact the region at the 2026 Midwest Economic Outlook Summit.
David O’Hara, managing director of MKI Global Partners, an investment advisory firm, said the Trump Administration’s tariffs have created an unstable scenario for the region’s trading partners.
“So what we've seen is certain countries start to drift from the United States as sort of the central beacon,” O’Hara said.
O’Hara pointed to China pulling back on the amount of agricultural products, such as soybeans, it buys from the U.S., opting instead to purchase more from Argentina and Brazil. China is one of Minnesota’s largest agricultural trading partners.
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On the other hand, he said tariffs also have a protectionist effect, insulating certain U.S. industries, such as the steel industry.
O’Hara said that’s because other nations subsidize their steel industries, making their materials more competitive than American ones.
“If subsidization of the steel industry in China were to come down, then the hope is that we can also reduce tariffs here in order to reduce input costs,” O’Hara said.
O’Hara made his comments a day before the Supreme Court ruled that President Donald Trump's tariff policies imposed under the International Emergency Economic Powers Act (IEPPA) are unconstitutional.
Migration and the labor force
Labor force growth was also a big topic at the summit.
International immigration is the most important source of local labor force growth in the near term, Minnesota State Demographer Susan Brower said.
“I don't see labor force growth turning around and speeding up again,” Brower added.
That means the state and business communities will have to grapple with how immigration is discussed and which legal pathways are available to attract foreign talent, she said.
Arik Spencer, president and CEO of the Greater North Dakota Chamber of Commerce, said chamber leaders throughout the state have been concerned about the slow pace of providing legal avenues for immigrants to remain in the U.S.
“We are a state made of immigrants,” Spencer said. “We need to remember that and be willing to accept more people from other cultures into North Dakota and acclimate them the best we can by being welcoming.”
He said that there’s now extra caution in his region regarding hiring and growth.
“I think one way you're finding employers coping with that is through increased automation,” Spencer said.
Artificial intelligence and data centers
While speakers were generally unsure about artificial intelligence’s impact on the local economy, they were more certain about the data centers supporting the AI industry that are sprouting across the Upper Midwest.
“If you look at the huge data center explosion that's taking place around the country, including here in North Dakota, feeding those data centers is a huge growth opportunity,” Minneapolis Fed Chair Neel Kashkari said. “Whether you're an electrician or a construction company helping to build those data centers, there's a lot of growth opportunity there.”
Kashkari said there are also downsides to the rise of data centers, such as increased energy use that drives up energy prices for consumers. Also, the surge in investment may pull money from other sectors and increase interest rates.
“Whenever there's big growth, there are some growing pains associated with that growth,” he said. “I don't want to minimize that, but I think overall, if we can boost the U.S. economy's productivity, that will be good for America long term.”
Shannon Full, President of the Fargo-Moorhead-West Fargo Chamber of Commerce, said the employment opportunities that data centers bring come with a limited supply of skilled workers. That means communities will have to balance allocating talent to those data centers and local projects.
"There is already a push-pull amongst local talent saying, ‘We already don't have enough electricians, welders, HVAC,’” Full said. “How can we ensure that our local projects aren't being hindered while we focus [our] attention?"
She also said it'll be on local leadership to attract new workers to the area and ensure they stay long after data center construction to grow the tax base. There are also local efforts underway to improve the skills of the existing workforce, she said, not just in data centers but also in other sectors such as agriculture, manufacturing, IT and healthcare.
“We're [in] a global competitive marketplace,” Full said. “So, how are we showing up across the country as one of the most dynamic regions where people do want to move here, stay here, live here, make a life here?”
