The current tariff on Chinese imports averages 21.2 percent, The New York Times reported, up from 3.1 percent at the start of 2017.
“I’m obviously concerned about the impacts to people at home. Washington state is the most trade-dependent state in the union, and Southwest Washington is one of the most trade-impacted (regions) in the state. It’s a huge deal for us,” Herrera Beutler said.
Hit hard at home
Business at the Port of Vancouver revolves around two main products: soybeans and copper ore. As Alex Strogen, the port’s chief commercial officer, told The Columbian recently: “Everything else is a rounding error.” Historically, China has been the port’s largest market for both commodities.
The value of exports from Vancouver always swings widely from month to month, especially for soybeans, which are a seasonal crop. But since Trump first imposed tariffs on China in March 2018, the lows have dropped lower.
Three times in the last year — October 2018, December 2018 and May 2019 — the value of exports from the Port of Vancouver to China have bottomed out at less than $500,000. Prior to this year, the value of Vancouver-China exports hadn’t dropped that low in more than a decade. Even slogging through the Great Recession, the monthly value of exports to China dipped below $1 million only twice, in August 2009 and January 2012.
On average, the monthly value of exports from the Port of Vancouver to China in 2017 was $77.7 million. By 2018, that figure had plummeted to $40.06 million.
The outlook hasn’t been entirely bleak. There are other markets for soybeans, Strogen told The Columbian.
In 2017, 96 percent of the product went to China, compared with 26 percent in 2018. Focusing on China alone makes the situation look worse than it is — between 2017 and 2018, the port’s total soybean output dropped less dramatically, from 1.3 million metric tons to 1 million metric tons. Now, routes from the port are more diverse, with many ships headed to Europe and Africa.
Copper ore, too, has found other markets in Europe and Asia.
But the situation remains volatile, and the latest tariffs mark an escalation of a trade war that’s grown increasingly punitive between Trump and Chinese President Xi Jinping. Just before enacting the latest tariffs, Trump called his Beijing counterpart an “enemy.”
In conversations with port leaders in Washington’s 3rd Congressional District — including the ocean terminal ports of Vancouver, Kalama and Longview — Herrera Beutler said she’s heard stakeholders say they are eager for the situation to be resolved.
“They’ve expressed that there’s concern, and they don’t want to be the sacrifice on the altar of getting this trade war fixed. But most of them have also acknowledged to me their recognition that China has been a very unfair actor,” Herrera Beutler said.
What can Congress do?
The Constitution gives Congress the power “to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States,” an authority that includes controlling tariffs imposed on imports.
But the executive branch can use a few different avenues to establish tariffs without congressional approval, and Trump used Section 232 of the Trade Expansion Act of 1962. It gives the secretary of commerce the power to investigate the impact of imports on national security, and the president the power to adjust tariffs according to the secretary’s findings.
Conceivably, Congress could limit that power by excluding certain countries and products from tariff eligibility. That’s an option on the table, but Herrera Beutler said she feels it would be premature to use it.
“We don’t always have to agree with an administration, but we do have the constitutional (control over) the budget. As we get into the season next year, we can look at what our options might be,” Herrera Beutler said. “I don’t want to get into that yet. I want to try to protect this space for the president to use his authority to bring this to a close, for our benefit.”
The congresswoman also said that she agrees with the Trump administration’s willingness to punish China for unfair trade practices, and for the country’s theft of intellectual property belonging to companies in the U.S.
“At some point, the country had to stand up for itself with regards to China’s infractions,” Herrera Beutler said.
“There’s no way out of this that’s not going to impact us in Southwest Washington,” she concluded. “I wish there was a pretty or easy way to slice this.”