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Trump’s trade talk raises concerns
About one-third of Washington state jobs depend on trade, so it’s nerve-wracking to watch the Trump administration flout diplomatic tradition with China, trash trade deals and promote steep tariffs.
The hope was that campaign rhetoric would give way to realism once the new administration settled in.
John Stuhlmiller, CEO of the Washington state Farm Bureau, told The Spokesman-Review that a trade war with China “would be terrible for our economy, absolutely.” But he added: “I would submit there is room for movement from rhetoric to reality.”
That could still occur, but the early signs are not promising.
The Washington Post reports that the tradition-breaking phone call between President-elect Donald Trump and Taiwan’s President Tsai Ing-wen was carefully planned to send a message that the relationship between the United States and China is about to change.
Trump’s belief that China is greatly to blame for U.S. economic woes is greatly exaggerated, but if the goal is to boost Taiwan and diminish China, he should support the Trans-Pacific Partnership. Taiwan is one of 12 Pacific Rim nations that would benefit. If TPP goes by the wayside, China’s economic influence would expand.
Trump has touted tariffs of 35 percent to 45 percent on imports. Other countries would likely retaliate, and the biggest losers would be export-dependent businesses. A misguided bid to revive the Rust Belt could devastate Washington state, where jobs related to Boeing aircraft, Eastern Washington’s wheat, Central Washington’s orchards and Columbia Valley’s wineries would be lost.
A confrontation with China is very much on the minds at Boeing headquarters. Last week, Boeing CEO Dennis Muilenburg laid out the stakes to the Illinois Manufacturers’ Association, according to a Chicago Tribune article.
“Last year, we delivered 495 737s from our factory in Renton, Washington, to customers around the world. One in every three of those 737s were bound for China. And about a quarter of all our airplane deliveries … were bound for Chinese customers,” Muilenburg said.
Bloomberg News reports that 75 percent of Boeing’s back-ordered planes are headed overseas. That’s up from 35 percent in 2000. Boeing’s global competitors would love to pick up this business.
“Our business thrives on free and open global trade,” Muilenburg said. “And it definitely creates U.S. manufacturing jobs.”
The good news is that Republican leaders in Congress are pushing back against Trump’s wish to impose tariffs as a way to punish U.S. companies that move jobs overseas and want to send products back into the United States. They’d prefer to reform corporate taxes by lowering the rate and coaxing money that is stashed overseas.
Trump also wants tax reform, so hopefully he’ll prioritize that and dial back the trade rhetoric.
Meanwhile, Washington businesses and workers are left to watch nervously.
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