Regardless of who wins Tuesday’s presidential election, federal trade policy will be essential to helping the economy recover from the coronavirus pandemic. This is especially true in Washington.
“As the most trade-dependent state in the nation, with approximately 40 percent of all jobs tied to international commerce, international trade will play a central role in any Washington state economic recovery,” said Lori Otto Punke, president of the Washington Council on International Trade.
All of that means that President Donald Trump’s trade war, particularly with China, has had a deleterious impact on this state. Supporters — including Rep. Jaime Herrera Beutler — say Trump has dealt forcefully with China to the benefit of U.S. workers and taxpayers. But Trump’s own assessment of his trade war has been detached from reality.
Trump imposed tariffs on more than $350 billion worth of goods on China, meaning that U.S. importers pay those taxes and either pass them along to consumers or see their own bottom line take a hit. The right-leaning Tax Foundation found that Trump’s new tariffs on products from China and other nations amount to the 17th largest tax increase on Americans since 1940.
Predictably, those tariffs resulted in counter-tariffs from the Chinese government. That has increased prices and reduced demand for American products in China, particularly agricultural goods.
And still, Trump insisted during a presidential debate with challenger Joe Biden that China is paying for the tariffs. “And you know who got the money? Our farmers, our great farmers, because they were targeted,” he said.
In truth, American taxpayers paid $28 billion to U.S. farmers hurt by Trump’s tariffs and China’s counter-tariffs. In 2019, before COVID-19 shredded the economy, U.S. farm foreclosures rose by 20 percent over the previous year.
During a virtual summit in July, the Washington Council on International Trade identified eight priorities for seeing the state through the pandemic. The first is, “Supporting our economy through smart trade policies during a global pandemic” — an issue that nobody will argue with but which could draw disagreement over what constitutes “smart trade policies.”
The second item is “advancing Washington trade priorities with China.” As Washington’s largest trading partner, providing a robust market for our high-tech industries and agricultural products, China is a key player in the Washington economy.
Being a key player does not mean China should have free rein. Theft of intellectual property is a continuing issue, and China frequently has flouted World Trade Organization rules since being admitted in 2001.
Trump has criticized Biden and the Obama administration for not cracking down on violations, but the president himself has had limited success in that regard. Both major political parties walked away from the Trans-Pacific Partnership negotiated between the Obama administration and 11 Pacific Rim nations as a counter to China’s growing influence.
Whether or not a President Biden would pursue the Trans-Pacific Partnership remains to be seen. But he has stressed a desire for international cooperation: “We need to be having the rest of our friends with us, saying to China, ‘These are the rules. You play by them or you’re going to pay the price for not playing by them, economically.’ ”
That would be preferable to having U.S. taxpayers and Washington businesses pay the price for a trade war.