Uncertainty looms large for businesses in Minnesota

Words like “disruption,” “disruption,” and “radical uncertainty” have become practically synonymous with Minnesota in the past few weeks.

While it is too early to draw firm conclusions based on the data, no one would venture to say that the combination of disruption and uncertainty will impose an economic cost on the country.

Just ask Tommy Bivas, owner of Jamaican-themed restaurant Pimento on Nicollet Street in Minneapolis.

“Business owners are afraid. Guests are afraid. Employees are afraid,” he said.

“How do you have a New York-born employee who is afraid to come to work? How do you have a Native American employee who is afraid to come to work? How do you have guests who are afraid to come to the city to support even their favorite businesses?”

Pimento is located 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 who honor Preeti’s life at the temporary memorial nearby. The baths are open to the public and anyone can get off the street and relax without buying anything.

However, the restaurant has bills to pay.

Like many small businesses in much of Minnesota, especially in the Twin Cities and surrounding suburbs, employees dread going to work. They worry about being arrested and harassed while on the move.

“We had legal immigrant employees and lost 75 percent of my kitchen,” said Michael Wilson, executive culinary director of Pimento Restaurants. “Salaried employees have had to work a lot harder.”

We met in the early afternoon, and Wilson said he had been washing dishes since 6:30 that morning.

A whole lot of doubts

Economic uncertainty in Minnesota extends beyond immigration enforcement. First, there are trade disruptions due to President Trump’s tariffs.

With a new governor in control and the state’s House and Senate elections in control, it may be difficult for businesses to know what combination of spending cuts and tax increases will emerge from legislative sessions this spring and next.

Perhaps more significant are concerns about the short- and long-term effects on the labor market of the immigration crackdown, according to Lewis Johnston, a professor of economics at the College of St. Benedict and St. John’s University.

“The primary source of labor force growth in Minnesota has been either the immigrant population or first-generation immigrant families,” he said.

The loss of this source of labor presents major challenges.

Overall, the scope of political and economic unknowns is deeper than usual.

Radical uncertainty greatly affects the risk decisions made by business owners and management. “The scale of potential outcomes becomes so large that you can’t plan for it, or it’s difficult to plan for it, so you need to stick with it rather than coming up with new things,” Johnston said.

In other words, the rational response on the part of business owners and executive leadership is to hedge against doubling down on the unknown by taking on less risk. Currently, trade terms such as “caution” and “wait and see” are appropriate.

In practical terms, this means conserving cash and resources.

“The company may postpone making investment or hiring decisions, and may have to give up some earnings, and perhaps a profitable opportunity as a result,” said Laura Calambokidis, a 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 scaling down ambitions is “a cost to the economy. But companies have to insure against policy risks.”

Difficulty finding work today

Alex Gabru, owner of A1 Tree and Stump Removal, navigates his company through multiple pitfalls. His company, along with about 1,300 other companies in Minnesota, recently lost its federal disadvantaged business certification.

The Trump administration wants them to reapply and explain why they qualify as disadvantaged without mentioning gender or race. He didn’t bother.

A first-generation immigrant from Ethiopia who said he was stopped by Immigration and Customs Enforcement in recent weeks, he is sympathetic to employees and contractors who don’t show up. But there is an economic cost.

“It’s really hard to find good workers,” he said. “This has always been a problem, but now it is more difficult.”

Case in point: Gabbro is developing a property it bought in East St. Paul. It will be a combination of affordable housing and storage for his tree company. Progress is slow.

“With the actual work going on on the development side, a lot of the contractors are immigrants, and it’s difficult to convince them to come out now,” he said. “I think it definitely slows down a lot of things.”

No wonder he sees uncertainty in the economy right now. There is no doubt that the uncertainty tax will negatively impact Minnesota’s economic dynamism.

Potential buffers

However, the domestic impact may be muted or exacerbated by the performance of the national economy in 2026.

“We have a diversified economy, an economy that is diversified in terms of industries, and doesn’t tend to have a lot of country-specific economic risks,” Calambokidis said. “The risks we face are often external, coming from the US economy.”

The remarkable resilience of Minnesota’s small business community also complicates the picture — in a good way.

For example, despite the turmoil, Pimento’s Tomme Beevas is looking forward to better days and continuing to grow his business.

“We can’t imagine a city where there’s no Vietnamese food, no Chinese food, no tacos, no smoked chicken,” he said. “We don’t want to be a bland land, and fortunately, we need to keep these ethnic businesses going — immigrant businesses — so we can have a more vibrant place to live, work and play.”

Entrepreneurs are optimists by definition, Gabro said, which may help explain why he doesn’t just hire second-chance employees, but why he can’t help but look for business growth opportunities this year.

He plans to find “people who want to do business with us” and share “the values ​​we have.”

“For 2026, I am still optimistic,” he said. “There are still good people in the world and we will continue to show up.”

Visibility is important when it comes to business and economics.

Among the many economic and political uncertainties weighing on Minnesota right now is the certainty that the small business community, especially immigrant entrepreneurs, is looking for their next opportunity.