WSCRC Executive Director Nor Coquillard and Director Man Wang are in China this week participating in a Washington State Delegation visit to Shanghai and Hangzhou. The delegation, led by the Director General of the Washington State Department of Commerce, Dr. Lisa Brown, has met with a large number of companies with interests in investing in Washington as well as many provincial and municipal officials who came to Shanghai for China’s annual International Import Exhibition (CIIE). Dr. Brown also was a speaker at a conference sponsored by the Ministry of Commerce as well as at an International Aerospace Forum. The team has now moved to Hangzhou where they will meet with a number of technology companies with interests in investing in the Seattle area. In addition, the team will visit Zhejiang University and conduct discussions with the Hangzhou Municipal Government. The WSCRC team has been instrumental in ensuring that the visitors are well versed on how to operate effectively in China to ensure that the trip is successful.
Beyond exports originating from Washington, our state is a major Pacific gateway for the movement of millions of containers (measured in 20-foot equivalent units), plus bulk and break-bulk cargo between China and locations in the U.S. More than a third of all containerized cargo by weight handled in Washington state is from trade with China.
Handling these shipments supports an extensive logistics system in our state that includes thousands of jobs in stevedoring, trucking, warehousing, transloading, rail services and freight forwarding. At The Northwest Seaport Alliance, a partnership between the ports of Seattle and Tacoma, 60% of all inbound containers come from China, while 32% of outbound containers are headed there. Containerized cargo, primarily linked to China, in 2018 directly supported nearly 15,000 jobs in the greater Seattle area. There also are shipments to China of soybeans, grain, and other bulk commodities and breakbulk, the handling of which supports economic activity in our state. A prolonged trade war with China could mean fewer products shipped through our state, hurting this important source of job creation.
In 2018, Washington’s ports handled 15.5 million metric tons of cargo to or from China, down from 25 million just a year earlier. By value, imports and exports subject to U.S. and China tariff lists fell from $27.2 billion to $24.1 billion in 2018, though imports actually increased. Agriculture exports handled at Washington ports experienced the most acute pain from the trade war, such as soybeans from the Midwest shipped through Washington ports.
Washington’s close linkages with China make this region all the more vulnerable to an extended contraction of trade, impacting local businesses and communities across the state. For years, U.S.-China economic ties have helped mollify impulses for more aggressive agitation and flare-ups. A reduction in economic interdependence means less economic benefits are immediately at stake from a more strained relationship or even confrontation, a dangerous scenario for the world and Washington state’s economic well-being.
Spencer Cohen is a senior economist at Seattle-based research firm Community Attributes Inc. He can be reached at email@example.com.