Economic ties between US states, China provinces touted as fix to spiralling cost of trade war
- Representatives from at least seven US states at a massive trade event in Shanghai have stressed ‘subnational’ economic ties amid US-China trade war
- Bilateral trade between the world’s two largest economies has nosedived in the 16 months since tariff battle began in July 2018
US state representatives at the massive China International Import Expo in Shanghai say they are focused on maintaining strong business ties with Chinese provinces to offset the effects of the damaging bilateral trade war.
At least seven states sent trade delegations to the second annual trade fair, an event intended to encourage foreign companies to do business in China, with many stressing the importance of regional connections while relations between Beijing and Washington remain frosty.
“When we talk about tariffs, there is a lot of negative news out there,” Craig McKinney, director of international affairs at the state of Kentucky’s Cabinet for Economic Development. “But really what we are doing is, we are focusing on the subnational level. The activities at the subnational level are more positive than mainstream media would show.”
When we talk about tariffs, there is a lot of negative news out there. But really what we are doing is, we are focusing on the subnational level
In the US, the tariffs have not only driven up the cost of many imported goods, but have hit manufacturers, ports and exporters, particularly in the agriculture sector, according to US state representatives at the trade fair.
“The trade war and tariffs make our trade relationship challenging and difficult, particularly in some sectors such as seafood, cherries, and wheat,” said Lisa Brown, the Washington state director of commerce who was visiting the expo for the first time. “We are hopeful that talks will be successful so that we can move forward with some important products.
“There is some aid coming from the [US] national government, but that's not enough to make up for the losses, especially for farmers and agri-producers.”
The state of Washington, which operates the ports of Tacoma and Seattle – two of the largest in the northwest – sent a delegation to the expo for the second time this year amid fears its strong trading ties with China were at risk. Imports from China account for about 60 per cent of the state’s total, while China is its largest export destination.
Seattle and Tacoma were among a group of six ports on the west coast of the United States that wrote to US President Donald Trump in late September expressing concern about the negative effects of the trade war on their economies, as 38 per cent of all American exports to China depart from there.
Brown said trade barriers and tensions could be overcome by strong relationships between US states and Chinese provinces. She was using the fair to create connections with provincial governments and companies in renewable energy, life science and education.
US officials at the expo were keen to tout the strong subnational relationships and positive developments on the ground, rather than focus on protracted trade talks at the national government level.
Utah sent two legislators at the last minute to show its commitment to its sister province, Liaoning, in China's Northeast rust belt.
“In Utah, we don't want to lose time while our national government is working out those positions and dealing with tariffs,” said Jacob Anderegg, a state senator, who used his adoption of two Chinese daughters as a personal connection to appeal to local officials and companies in Shanghai.
Kentucky, whose main exports to China include auto and aerospace parts, has two corporate exhibitors at the fair – clean coal firm Birtley and GE Appliances – both of which are owned by Chinese manufacturers.
We need to keep dialogue open. Your presence here shows confidence in the US-China economic relationships
Ren Hongbin, assistant minister of commerce, said that many Chinese provinces and US states had kept in close contact with each other even though their trade had been disrupted over the past 16 months.
“We need to keep dialogue open. Your presence here shows confidence in the US-China economic relationships,” Ren said in a speech at the forum.
A total of 192 US companies signed up to attend this year’s expo, up from 174 during the first event in 2018. Among them are aircraft maker Boeing, technology behemoth Microsoft, and social media giant Facebook, which is banned in China, but was at the event to promote its VR glasses.
Seage Technologies, a company that builds software for manufacturers, was one of six firms Washington state brought to the fair this year. Company representatives said the business was focused on selling software to Chinese manufacturers, including those who had opened factories in the US.
“At the moment, we are immune from the trade war. In the past, we were mainly focused on localising our software in China, project by project. Now we are considering expanding our business into consulting,” said Kris Shen, marketing director of China branch of SeageTech.
