Overall, the message is encouraging. Experts at The Columbian’s recent Economic Forecast event said they do not see a recession as imminent, that many economic indicators remain strong, and that the policies of President Donald Trump have sped up growth.
That is good news. And an unemployment rate that has hovered slightly below 4 percent — essentially full employment — is certainly better than the 10 percent found during the depths of the Great Recession.
The key now is to avoid the pitfalls that led to a sharp economic downturn a decade ago and for policymakers to avoid becoming complacent. As Raul Elizalde wrote for Forbes: “Studies show that forecasters are generally blindsided by recessions, precisely because they tend to be preceded by economic strength.”
In the state of Washington, caution is fueled by a continuing trade war. Increased tariffs on imports from China were followed by retaliatory tariffs by that country, and the tariffs have landed hard in Washington.
For one example, in 2017 about 2 million metric tons of soybeans flowed through the Port of Vancouver, mostly headed to China; through September of 2018, about 67 metric tons of soybeans had gone through the port. The sale of Washington apples and cherries also bottomed out in 2018, affecting farmers, their vendors, and those who transport the products.
Considered the nation’s most trade-dependent state, Washington is especially vulnerable to a downturn in international commerce. As Gary Williams of Vancouver-based United Grain told The Columbian in November, “We always hate to see food used as a trade tool or a bargaining instrument.”
While Trump cited a trade deficit with China as part of the impetus for the tariffs, preliminary data show that the trade imbalance grew 17 percent in 2018, according to CNBC. While it is important for the United States to hold China accountable for suspected fraud and intellectual theft, we fear the collateral damage from a continued trade war will outweigh any eventual benefits.
Meanwhile, the Trump administration has forged a trade deal with Canada and Mexico, which combine to take in about 13 percent of exports from Washington. The Washington Council on International Trade sees numerous benefits in the new United States-Canada-Mexico Agreement, which has been signed but not ratified. “More than 330,000 jobs in Washington state are tied to trade with Canada and Mexico, and we believe this new agreement will expand opportunities for Washington companies, farmers, ranchers, businesses, innovators and workers,” WCIT President Lori Otto Punke said last month.
With unemployment low and economic growth fairly robust, there is reason for confidence. But the specter of a national debt growing at historic levels casts some doubt on what is to come. Trump’s policies have borrowed from future generations to fund tax cuts, and the national deficit is projected to reach $1 trillion this year alone and drive the debt to about $23 trillion. Climate change also is likely to have a big impact on the economy and must play a role in the formulation of policy.
But on the ground level, the most important facet of the economy is jobs, and in Clark County the market is strong. Scott Bailey, state economist for Southwest Washington, reported at the Economic Forecast: “We’ve had five years in a row of 4 percent job growth. That’s incredible.”
Keeping that going will depend on wise trade policies and a strong national economy. But for now, the outlook is encouraging.