China's importance to Charleston, SC growing even as trade war rumors stir
Date: Thursday, May 3, 2018
Source: The Post and Courier
South Carolina has vaulted to the nation's fourth-largest exporter to China, with BMW vehicles and Boeing airplanes helping to nearly wipe out the Palmetto State's trade deficit with the Asian economic power, a new study shows.
The report by the U.S.-China Business Council comes at a time when Trump administration officials are heading to Beijing to meet with the Chinese government over possible trade sanctions.
The U.S. is threatening to place tariffs on up to $150 billion worth of Chinese goods. China has said it would retaliate with steep tariffs of its own on agricultural products like pork — another key export commodity for the Port of Charleston.
South Carolina's emergence this past decade as a top exporter to China coincides with German automaker BMW more than doubling production of vehicles at its Upstate plant, which now exports about $2.4 billion worth of SUVs to China.
It also follows Boeing Co.'s decision in 2009 to build an assembly campus for its 787 Dreamliner commercial jets in North Charleston. Planes and aerospace parts account for $2 billion in exports to China.
Jim Newsome, president and CEO of the State Ports Authority, said he thinks there is room to negotiate better trade deals between the U.S. and China, but he doubts a full-out trade war will erupt.
"This discussion about who has more to lose in a trade war than the other is a bunch of nonsense —both sides have too much to lose," Newsome said. "China has a growing middle class of 500 million people and they want U.S. products, and we need their production.
"I think at this point in time, everybody views this as something that will get worked out," he said.
The report from the U.S.-China Business Council — a nonprofit promoting free trade between the two countries — shows products exported from South Carolina to China have grown by 660 percent over the past decade, from $800 million in 2008 to $6.3 billion last year.
At the same time, the value of goods moving from China to the Palmetto State has grown at much slower pace, at 195 percent.
That means South Carolina's trade deficit, which once stood at billions of dollars, is now roughly nonexistent in global commerce terms at roughly $300 million.
As a nation, the U.S. trade deficit with China hit a record $375.2 billion in 2017.
South Carolina now ranks fourth among states with exports to China, behind Texas, California and Washington.
Instead of creating tariff-related trade barriers, the council says U.S. officials should be looking for ways to boost exports of American-made goods to China.
"The United States should pursue multiple approaches to improve market access for U.S. companies, including bringing legally sound, industry-supported cases to the World Trade Organization, coordinating with like-minded countries on advocacy with China and engaging in results-oriented dialogue with China to address barriers of longstanding concern," the report states.
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