US trade policy hurts Ohio industries

By Hu Zexi

The US-initiated trade frictions against various countries have put people in Ohio into anxieties, as industry representatives complained the economic losses caused by the US government’s trade policy at a meeting in Columbus, the state capital.

Bret Davis, a soybean farmer in Delaware, Ohio, said he suffered economic losses of more than $400,000 this summer. He told People’s Daily that if the prices for soybeans remain low in the next two to three years, he would be unable to afford his household bills.

Ohio is located in the Great Lakes region of the US and its economic aggregate is among the top ten in the country. According to local media, a report by the Ohio State University indicated that prolonged tariff measures will reduce the net income of cultivated crop growers in the state by 59 percent.

American soybean planters spent 35 years exploring the Chinese market, Davis said. Before the trade frictions, one third of American soybeans were exported to China.

The widely opposed tariff policy forced the US government to propose a farm subsidy plan to offset the losses. However, the plan was like a band-aid, which was far from being able to heal the big wound caused by the trade war, Davis said, adding that the longer the tariff measures persist, the harder it will be to repair the damages created.

Ian Sheldon, an economist and a professor of international trade and economics at Ohio State University, said the trade war has brought great uncertainties and means a blow to investment. For instance, Canadian enterprises are less enthusiastic in investing in northern America because of it.

The American enterprises will need a couple of months, even years to transfer its supply chains and find suitable new suppliers, said a letter to the US trade representative Robert Lighthizer written by Americans for Free Trade, an organization jointly established by more than 80 American trade associations.

They stressed in the public letter that Washington didn’t give them enough time to redesign their supply chains, as the new tariffs came into effect just 6 days after the list of Chinese imports subjected to additional tariffs was announced. This move is unacceptable for them.

The US ship manufacturers experienced a sharp rise in production cost due to the additional tariffs on imported Chinese steel and aluminum, as well as Chinese vessel parts.

Maggie Sheely, manager of congressional and public affairs for the US Chamber's Great Lakes region, told People’s Daily that a large number of small- and medium-sized enterprises are challenged by the same issue, adding that some of these enterprises would only last a few months before they go bankrupt.

While only 900 US enterprises benefited from the additional tariffs on Chinese steel and aluminum, 30,000 suffered losses due to the tariff policy, she noted.

Statistics showed that $3.3 billion worth of goods exported from Ohio to Canada, China, Mexico and Europe would be affected by the US tariff policy, the 7th highest figure in the US. In addition, about 1.5 million jobs in the state are supported by international trade.

In addition to foreign trade, economists believe the prices of daily consumer goods will also rise as the US government keeps widening the range of goods subjected to rising tariffs. As a result, every American household will be burdened by the tariffs.

Sheldon said trade researchers know that adding tariffs will lead to a rise of prices of domestic consumer goods. Washington sees trade as a zero-sum game, but trade has been widely regarded as a win-win behavior since the period of Adam Smith.

The economist feels very anxious about the current US trade policy. During the two World Wars, the US tariff policy aggravated global economic crisis. Learning from this, the US Democrats and Republicans generally supported multilateral free trade mechanism, except the Trump administration.

The wrong trade policy of the US would hurt multilateral trade system, Sheldon concluded.

Source: People’s Daily