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US-China trade dispute impacts California economy

By Xin Gong (People's Daily Online)    16:46, July 19, 2019

The California State Assembly held a hearing on Wednesday to discuss the effects of the trade tariffs imposed by the US on China on the Californian economy, as China is the state's third-largest export market, with more than $16 billion in goods exported in 2018.

Deputy Chinese consul general in San Francisco Ren Faqiang, California's Lt. Governor Eleni Kounalakis, and leaders from various trade and research organizations participated in the hearing, convened by the Assembly Select Committee on Asia/California Trade and Investment Promotion, and the Assembly Committee on Jobs, Economic Development and the Economy.

"The tariffs dispute with China initiated by the Trump administration has been deeply disruptive to stakeholders across the country," said California's Lt. Governor Eleni Kounalakis.

According to Forbes News, US exports to China fell by 19.86 percent in the first half to this year due to the impact of tariffs increase on Chinese goods. Exports of soybeans, oil, natural gas, scrap copper, cotton and automobiles were all hit hard. US consumers and importers lost $4.4 billion per month last year due to the increase in tariffs.

According to media reports, the tariff increase has impacted the logistics industry in Southern California, affecting 1 million jobs related to international trade in the region as well as disrupting regular supply chain operation. Californian companies selling almonds, lemons, citrus, cranberries, and wine could have made considerable profits on exports to China. However, local farmers have instead suffered losses due to the shrinking Chinese market.

Gene Seroka, the executive director of the Port of Los Angeles, recently told CNBC that exports to China last year declined by about 25 percent.

He said cargo that goes through the port includes items not only produced in California but coming via rail from Midwestern states, including soybeans. Other sector hit by the trade war on the export side, he further noted, are electronic products, household goods, and recyclable items. Seroka said many exports were down double-digit percentage levels in 2018 from the year prior.

The contiguous California ports of Los Angeles and Long Beach together comprise one of the largest port complexes in the world and represents about 60 of all US maritime trade with China.

As Eleni Kounalakis said: "We are already feeling the impact of the US-China tariffs dispute."

Assembly member Phil Ting echoed Kounalakis's remarks. "If we continue to have a tariff war between the US and China, I think that would have a very negative impact on California," Ting said.

As stated in AJR No. 44 of the California State Assembly, passed on August 30 last year, China is California's largest trading partner, the largest source of imports and the second-largest export destination, as well as an important partner in climate change and green development cooperation.

In 2018, California's trade volume with China reached $177.53 billion in total, accounting for 26.9 percent of total US trade with China that year. California also attracted Chinese investment of $26.8 billion, ranking first among all states in the US.

"We want to maintain and foster strong economic relationships with China," Ting said, "hopefully, this won't have a long term impact, and the tariffs will go away."

A good China-US relationship conforms to not only the common interests of our two countries, but also the aspirations of the two peoples and the international community, said Ren Faqiang, deputy Chinese consul general in San Francisco.

He called on the US to work with China to achieve better mutual development through joint efforts based on mutual respect and equal treatment. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Hongyu, Bianji)

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