Trade wars threaten Oregon and the U.S.
President Trump’s go-it-alone tariff battle with China, Canada and Europe threatens to reverse his own administration’s single-largest claim to success — the continuing upswing of the U.S. economy. Not only are those countries responding to his tariffs with tariffs of their own, their leaders are urging their citizens to think twice before buying American.
And that economic shadow threatens to hover directly over Oregon, which counts China as its top export market and Canada as its third-largest. Oregon exported $5.8 billion in goods and services to China in 2016, according to Oregon Business Magazine, making it far and away the top target for Oregon products and services sent out of the country. Canada took in $2.1 billion in the same year. The other top recipients are all in Asia: Malaysia, Japan, South Korea and Vietnam.
Oregon sectors threatened by the trade war include technology, fruit, fish. The list of U.S. sectors specifically targeted by countries responding to Trump’s tariff hikes runs into the hundreds, but could easily expand far beyond that.
Countries and their citizens don’t like being threatened and bullied, two of the president’s specialties. So the tariffs may be only part of the toll exacted on U.S. manufacturers. There are widespread reports of Canadians boycotting American goods and canceling planned vacations to their southern neighbor, not only because of the tariffs but also in the aftermath of Trump’s personal attacks on Canadian Prime Minister Justin Trudeau.
Trudeau did not call for a boycott of American goods, but in response to a question about purchasing U.S. products pointedly said it was important for Canadian citizens “to make their own choices about how they want to spend their money.”
We’ve already seen the tit-for-tat responses from the countries targeted by tariff hikes, but our president might do well to limit his insults. China, in particular, has ways of getting even. In 2011, sales of Norwegian salmon plummeted by 60 percent after the Norwegian-based Nobel Peace Prize was awarded in Oslo to the Chinese dissident Liu Xiaobo, whom the Chinese government had branded a “criminal.”
Market forces often take a back seat to political forces, particularly in countries like China, where the two are controlled by the same people. China, among others, will be more than happy to step in to fill the economic leadership role being abdicated by the U.S.
All of this international bickering began with Trump’s stated intention of defending the U.S. steel industry, saying that protecting steel and other manufacturing jobs was a national defense issue. We were losing jobs that our own blue collar workers could be performing.
Trudeau rightly labeled the defense issue as preposterous and the facts also cast the jobs claim in a harsh light. Circling back to Oregon, we discover that Columbia Steel Casting in north Portland is indeed struggling. But not struggling with a shortage of customers, cash flow and layoffs. No, like many other manufacturing operations, it’s biggest struggle is in finding workers to fill its vacant jobs. It has 50 open jobs it can’t fill, preventing it from expanding to meet the demand.
The trade wars may or may not create more manufacturing jobs in the U.S., which we may or may not be able to handle. While that remains uncertain, there is no doubt that the United States has again been diminished in the eyes of the world and, in the near term at least, in its standing in the global economy.