A potential trade war touched off by President Trump's proposed tariffs on steel and aluminum could seriously hurt Washington state's economy.
The state is considered the most trade dependent in the country, exporting agricultural products and Boeing planes. Eighty percent of Boeing jets are sold overseas.
But the state also used to be a large aluminum producer, one of the industries President Trump is trying to protect, if not revive.
The concern is that Washington will lose far more than it gains, as much of that aluminum industry has shut down.
There are a lot of unknowns. What we do know the level of proposed tariffs, including 25 percent on steel. What we don’t know is the retaliatory toll that could be taken out on Washington industries, from agriculture to aviation, and which countries will push to tax exports from the state.
Tuesday, the Washington Council on International Trade responded to the administration’s tariff proposals saying they will not only drive up consumer prices but are, "...inviting retaliation against Washington state exports and investment.” Adding, “In Washington state, we depend on our global competitiveness.”
“Washington is not only a trade dependent state, we’re dependent on imports as well as exports-because we have a big logistics and supply chain,” says Debra Glassman, the Faculty Director at the Global Business Center at the Foster School of Business, part of the University of Washington. She is also a senior lecturer in business economics. Employees at seaports, airports, freight forwarders, those who write letters of credits and provide other services all parts of that supply chain.
How dependent is Washington on trade? According to the Washington State Department of Commerce, one in three jobs are trade related. Other estimates place that number as high as 40%. Commerce says the state is first in exports per capita, $10,917 worth of goods exported per person. Among states, only much larger Texas and California exported more. And while the numbers are skewed higher by billions of jets exported each year, 2014 data showed that while Washington had 12,656 exporting companies, the vast majority, 11,352 are classed as small and medium sized.
But the tariff announcement is coming as less of a shock, than putting ongoing trade risks into sharper focus under Trump.
“We’ve known for a year and one half, that this is a different time for trade.” Says Eric Schinfeld, senior manager for Federal and International Government Relations for the Port of Seattle, and formerly with the WCIT. “We no longer have the same consensus on ‘free trade is good, tariffs and protectionism is bad.’”
“I think there’s a sense of disbelief that the international trade structures and norms that we’ve built over decades are suddenly teetering,” says Glassman.
