US States Most Hit By Chinese Tariffs May Not Matter Much Electorally

IT FITS WITH US President Donald Trump’s maximalist approach to most things that he has now said he is ready to impose tariffs on everything China sells to the United States — all $500 billion worth.

For those keeping score at home, Washington has currently announced tariffs on $200 billion of China’s exports, to be imposed in September, having started at $3 billion-worth introduced in March, followed by $46 billion announced in April and imposed in July, with $50 million in effect currently.

Beijing, for its part, has retaliated with tariffs on $50-billion of US exports, of which $34 billion have been in place since July 6.

It has been often said that Beijing has targeted US goods for political impact at the state level to apply leverage against the Republican administration. However, our man in Washington points out that those US states that are most affected by the tariffs imposed so far by China are not especially salient to Republicans’s prospects in November’s midterm Congressional elections in the United States, as the table below shows.

State % total exports affected by Chinese tariffs to date Senate House: No of Republicans at risk
Alaska 16.1 No election 0
Alabama 11.2 No election 0
Louisiana 10.0 No election 0
South Carolina 8.0 No election 0
Washington 6.9 Safe Dem 1
Illinois 3.2 No election 2
Kentucky 3.0 No election 1
Virginia 2.6 Safe Dem 4
California 2.3 Leans Dem 0
Maine 2.2 Safe Ind/Dem 0

Such is the scale of US-China trade that there is, of course, much scope for that pressure point to be intensified, and it may be that the impact of US tariffs on US multinationals’ supply chains will prove more politically impactful in Washington.

1 Comment

Filed under China-U.S., Trade

One response to “US States Most Hit By Chinese Tariffs May Not Matter Much Electorally

  1. China is simply running out of US products to tariff. If this keeps up for much longer, China is going to hurt, and hurt bad. The CPC relies on prosperity to keep in power, and if it loses the Mandate of Heaven, it will fall.

    http://zeihan.com/of-china-and-oil/

    The Americans’ imports from China are triple China’s imports from the United States (quadruple if you factor out services). The simple fact is the Chinese are already running out of American imports to penalize. Any effort to shift the dispute to something beyond goods trade will similarly end in colossal failure. The Americans control global trade routes, global energy, global security, and global finance — everything that makes the Chinese system possible. The Chinese simply can’t bring the fight to other fields without suffering immeasurably. (Which isn’t the same thing as me saying I’d like to be an American company operating in China right now.) Chinese holdings of American government debt don’t even give Beijing leverage as such “investments” in reality are capital flight from the Chinese system.

    While Chinese state media continues to put on a brave face, the days of tone-deaf chest-beating are gone. Government censorship guidelines now regularly bar terms like “Trump tantrum” and “trade war” and in general discourage the discussing of any angle of the issue whatsoever. One of the problems with stoking nationalism is that it can be hard to turn off. With the Politburo realizing they have little ammo for this sort of fight, political consolidation at home is far more important than scoring points in a media firestorm.

    The concentration of power in the global system continues to gather in the Americans’ favor. Trump is demonstrating he doesn’t need to build an alliance to fight and win a trade war with multiple countries simultaneously. Trump is showing he can wield financial tools simultaneously with trade tools to crushing effect. Trump is showing an enthusiasm for standing up to the business community, something that resonates not just with his base, but also Bernie Sanders’. And in case you missed it, last week the United States became the world’s largest oil producer courtesy of shale, granting Trump even more leverage and autonomy in international relations.

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