MASS. DRAWN INTO TRADE WAR
China is retaliating against U.S. trade threats with a round of politically focused tariffs on soybeans and other agricultural products, whiskey, automobiles, chemicals and aircraft that’s pulling a number of Massachusetts industries into the multibilliondollar trade war.
The goods China is slapping with steep tariffs are designed to exact a clear political price in the U.S. — Kentucky bourbon for Sen ate Majority Leader Mitch McConnell, cranberries for House Speaker Paul Ryan of Wisconsin and soybeans, wheat, beef, corn and tobacco from the swath of red states that put President Trump in the White House.
“Their goal is to impose political pain on their target,” said Joel P. Trachtman, professor of diplomacy at The Fletcher School at Tufts University. “China seems to be very clearly developing a titfortat strategy. … You’ve got an escalating trade war, where it’s hard to say where it is going to stop.”
Bay State cranberry growers are concerned that the Chinese tariffs will squelch growth for the expanding $45 million market for their product there.
Terry Humfeld, director of the Cranberry Institute, said the industry “is disappointed that we’ve been caught up in this impending trade dispute.”
Cranberry farmers invested heavily to break into the Chinese market, Humfeld said.
“It’s a growing part of our business,” he said. “We hate to see things like this possibly stop that growth from happening.”
This latest round of trade escalations stems from a Trump administration decision last month to slap tariffs on imported steel and aluminum, which triggered a $3 billion round of Chinese tariffs on Monday, a $50 billion response from the U.S., and yesterday’s latest round from China of 106 U.S. imports.
Impending trade disputes with China and the European Union has cut into Massachusetts manufacturers’ confidence in the economy, according to a new survey.
The Associated Industries of Massachusetts confidence index dipped in March from February’s 17yearhigh mark, with employers feeling roiled by the toll a trade war will take on their bottom lines.
A small portion of Mas sachusetts’ exports will be touched by China’s targeting of the U.S. aerospace industry. Aircraft parts accounted for $8.1 million of Massachusetts’ exports last year. General Electric’s aviation division assembles engines in Lynn, but the vast majority of the factory work there is military contracts that do not involve business with China.
Massachusetts businesses exported $2.3 billion worth of goods to China in 2017, according to federal statistics.