China’s unfair trade actions cost California critical jobs
Donald Trump wants to slap defensive tariffs on countries like China that use unfair trade practices to steal American jobs — and a lot of exporters in California are freaking out for fear of retaliation. So should we be afraid of a Trumpnomics trade war — or will better-negotiated trade deals bring back the kind of rocksolid manufacturing jobs that used to pay for the white picket fences and single-family homes of blue-collar workers in the Golden State?
To answer this critical question, let’s start with some deeply troubling truths: California’s annual trade deficit is the largest of any state in the nation. At close to $250 billion a year, it pencils out to tens of thousands of jobs lost year in and year out. (See accompanying chart.)
This is not to say that California has no big winners in the trade game. Almond growers from Fresno and Kern counties to Stanislaus and Tulare counties, for example, are absolutely giddy with the billions of dollars of fresh and dried nuts that find their way into markets and popular almond milk around the world — as are the “I’ll toast to trade” exporting vintners of Napa, Sonoma and Santa Barbara counties.
Household income stagnant
Equally happy are the state’s aerospace champions such as Lockheed Martin and Raytheon — along with a thriving ecosystem of smaller companies in their supply chains. Collectively, they export megabucks worth of everything from civilian planes and fighter jets to bombs, spacecraft and rockets.
On the other hand, there are those semiconductor factories that used to spring up like weeds in Santa Clara and Orange counties. Many of these job creators have been summarily offshored by U.S.-domiciled corporations that salute no American flag — much less the California bear flag.
And what about all those iPhones Americans rush to buy at their local wireless carrier marts? While Apple in Cupertino may design these adult toys, the actual units are churned out in highrise Chinese sweatshops surrounded by suicide nets manned (and mostly womanned) by quasi-slaves working 16 hours a day.
Sure, a growing legion of young, underemployed and restive Californians could build these iPhones in Bakersfield or the Bay Area for a few extra bucks at retail. However, Apple’s “let them flip burgers” corporate culture wants no part of any Trump- or Sanders-inspired onshoring movement interfering with its bottom line.
Of course, if the next American president were to crack down on the unfair trade practices of countries like China, wouldn’t America be shooting its poor people in the wallet? After all, such defensive tariffs would only raise the prices of all that cheap stuff now stuffing the Big Box retailers that dot our suburbs.
Well, of course, that’s true, but here’s the thing: It doesn’t matter how cheap a foreign import is if you don’t have a job and the income to buy that import. And on that sour note, let’s not forget this:
Since America fully opened its markets to China in 2001 and lost more than 50,000 of its factories in the process, the real median household income hasn’t risen at all. Is it any wonder you may struggle more and more to keep food on the table, pay your mortgage, put your children through college, and retire with your head held high and your golden years secure?
Making marketplace fair
But wait! Don’t we have this whole trade debate all wrong? It’s not countries such as China and Mexico stealing our manufacturing jobs, but technological change.
Certainly, there is some truth to that. If you don’t believe me, just go visit the Tesla factory in Fremont and watch, firsthand, an orgy of automation.
On closer inspection, however, the “robots stole my job” argument is at best only partly right. While technology certainly has replaced certain factory functions, there are still plenty of jobs to go around — if only we could keep them home.
So here’s an idea for these presidential election times: The next time an economist like Robert Reich tells you that California’s manufacturing jobs are gone forever and that the only solution is for the government to don its Robin Hood tights and take from the rich to give to the poor, tell him the same thing Trump is telling the American people: The best way forward is to simply level the playing field so that American workers can compete in a fair global fight.
And compete we Californians will — whether it be with robots or currency-manipulating Chinese mercantilists.
Peter Navarro, a macroeconomist, teaches at the Paul Merage School of Business at UC Irvine and is author of “Crouching Tiger: What China’s Militarism Means for the World” (Prometheus Books, 2015) and director of “Death by China,” a documentary history of China’s entry into America’s markets: www.crouchingtiger.net. To comment, submit your letter to the editor at www.sfgate.com/submissions.