Sunday, July 8, 2018

Trade War Notes

The trade wars have begun. Washington State does a great deal of international trade. In part, due to our northern ports facing the Pacific. But the State also produces a lot of products that are shipped overseas. The US Chamber of Commerce put together a state by state highlight of the value of exports that will face tariffs. For Washington State the value of goods facing tariffs is more $6 billion (uschamber.com/tariff_data/one_pagers/wa.pdf).

Mexico has been especially strategic and that nations's retaliation will hit Washington fruit hard as well as potatoes. The Canadian strategy is to avoid supply chain issues for Canada.

I am not convinced about the Trump administration strategy, particularly with regards to Canada, Mexico and the EU. And I suspect that China situation is not well understood and will lead to long term harm.

Krugman knows a bit about trade and suggests that Trump will be well remembered for his statement that "trade wars are good and easy to win": Krugman: how-to-lose-a-trade-war

It appears the European thinkers will be strategic as well voxeu.org/new-cold-trade-war.

For Washington State - exports will remain important. It will be hard to consume all those apples.




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