$500 Billion
Here’s a look at the 5 largest U.S. trading partners in 2016
$250 Billion
Imports Exports Total
$125 Billion
$50 Billion
TOTAL $578.6B
China
TOTAL $544.9B
Canada
TOTAL $525.1B
TOTAL $195.5B
TOTAL $163.6B
Mexico
Japan
Germany
Source: Perspective: The Impact of Trade Policy on the Industrial Market, Cushman & Wakefield.
Report: Trade policy could reach into industrial market by Matthew Clark mclark@scbiznews.com
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new report issued by the real estate firm of Cushman & Wakefield suggests a national focus on slowing the nation’s trade deficit could have a reaching impact into the industrial market. The report, “Perspective: The Impact of Trade Policy on the Industrial Market,” said policy of picking up exports and dropping imports could have an effect on industrial market across the country. “President Trump says he believes in ‘free trade but also fair trade,’ and as policy details emerge, companies will start looking at their supply chain networks to determine the impact on operating costs,” said Jason Tolliver, head of Industrial Research, Americas at Cushman & Wakefield, in a news release. “The importance of China, Mexico and Canada as export partners makes withdrawal from the North American Free Trade Agreement or a trade war with China unlikely scenarios.”
According to Tolliver, the U.S. has trade obligations with 20 countries through 14 different trade agreements. Those 20 countries account for 70% of U.S. exports and more than 80% of its imports. The U.S. imported nearly $500 billion worth of goods from China in 2016, making it the leader in imports by almost double the next-closest country, Mexico. China received the third-most exports from the U.S. at over $115 billion in 2016. In the report, it was noted two recent executive orders issued by President Donald Trump “to make trade policy tougher on foreign governments that subsidize companies that sell goods at below-market prices and calling for the Commerce Department to produce a report on every possible reason for the trade deficit in 90 days.” Despite the orders, the report suggested China “remains too important of a trade partner for the U.S. to engage in a trade war.” “China’s growing consumer class will exceed the entire U.S. population by 2026,”
Tolliver said. “Similarly, when you consider the impact of increased cross-border trade flows between Canada, Mexico and the U.S. since NAFTA, it seems unlikely the U.S. would withdraw.” The report found the value of U.S. imports from the Pacific Rim — including China — only slightly changed from 47.1% in 1990 to 46.8% in 2015. During the same time, the share of U.S. imports coming from China went from 3.6% to 26.1% “In other words, while China has become an increasingly important source for U.S. manufactured imports, the relative importance of the rest of the Pacific Rim has declined since 1990,” the report said. Specifically, Japan has dropped significantly in terms of U.S. manufactured imports. In 1990, Japan was the source of 23.8% of U.S. manufactured imports, but that number dropped to 6.5% in 2015. At the same time, China’s share went from 3.8% to 24.3%. Other statistics in the report include: According to the International Trade
Administration (ITA), U.S. goods exports to Canada supported the greatest number of U.S. jobs followed by Mexico, China, Japan and the United Kingdom; According to the ITA, the total number of jobs supported by goods exports has increased by 890,000 since 2009; Over that time period, the largest increase in jobs was associated with goods exports to Mexico (296,000, or one-third of the total increase), followed by China (184,000 jobs supported) and Canada (110,000 jobs supported). Trade agreements, according to the U.S. International Trade Commission, showed an increase of 26.3% in bilateral trade with the 20 countries the U.S. has trade agreements with between 1980 and 2016. Real gross domestic product jumped $32.2 billion over that time and increased trade surpluses or reduced trade deficits dropped the U.S. trade balance by $87.5 billion. Reach Matthew Clark at 864-235-5677, ext. 107 or @SCBizMatt on Twitter.