Wednesday, May 12, 2021
May 12, 2021

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In Our View: State’s economy depends on trade relations

The Columbian

The most reliable estimate — at least prior to the pandemic — is that about 1 in 5 jobs in Washington is related to international trade. In other words, what happens overseas reverberates in all regions and all sectors of the economy throughout the state.

That calls for President Joe Biden and Congress to quickly repair relations with reliable trading partners, particularly China. The Trump administration’s bunker mentality in regards to trade has combined with coronavirus-caused disruptions to put a big dent in Washington’s economy.

Trump had incorrectly concluded that a trade deficit was bad for American business and consumers. “Unacceptable,” he said in 2017. “We are going to start whittling that down and as fast as possible.”

The strategy: Launch a tariff war. The result: A trade deficit that, according to the U.S. Department of Commerce, jumped 18 percent last year to $679 billion — the highest since 2008.

Trump was wrong on the premise and wrong on the policy — a dangerous combination.

Now, as detailed by The Seattle Times, that misguided policy is coming home to roost. The quick explanation: Chinese goods are in such demand in the United States that cargo ships are making deliveries to U.S. ports, then turning around and taking empty containers back to China for a refill. It is more economically viable to carry empty containers than to wait until they are filled with goods from the United States.

That has led to a shortage of cargo space for goods from Washington, particularly agricultural products that long have found markets in Asia.

As the Times writes: “In Wenatchee, tens of thousands of boxes of apples that should be on their way to the Middle East and Asia are piling up instead in warehouses. In Ellensburg, it’s a similar story for mountains of hay bales that would otherwise be on container ships bound for Japan and South Korea.”

COVID-19 has played a role in the imbalance. With more and more people ordering online, demand for products from China is fueling the market. As one exporter said: “It’s become, really, a complete supply chain meltdown on the Pacific Ocean.”

That can have long-term effects. As U.S. Rep. Kim Schrier, D-Sammamish, said: “My biggest worry is that suddenly what seemed like a blip in exports and a temporary problem becomes, well, now China is going elsewhere for their apples and their cherries and their hay.”

Seattle and Tacoma both rank among the 10 busiest U.S. ports. Los Angeles and Long Beach, both in Southern California, rank first and second. And when ports have difficulty sending out exports, it impacts the growers, manufacturers, truck drivers, railroads and longshore workers who all are part of the supply chain.

Schrier said the Federal Maritime Commission is exploring whether shipping companies’ practices violate U.S. law — and she thinks the threat of federal action or a congressional inquiry could induce shippers to stay in U.S. ports long enough to load more full cargo containers.

But in the long run, a rethinking of global trade policy is necessary. Trump rightly tried to hold China accountable for intellectual theft and what his administration said are violations of international trade law, but his approach was ineffective. The Biden administration and members of Congress must recognize that international coalitions are essential for tempering China’s influence on international trade.

For Washington, which is the nation’s most trade-dependent state, federal leadership is crucial to long-term economic prospects.