The escalating trade war, pitting the U.S. against the world, has an outsized impact on Washington state, where 40% of all jobs are trade-related. Proposed under the pretext of national security – particularly Section 232 of the Trade Expansion Act of 1962 and Section 301 of the U.S. Trade Act of 1974 – the tariffs are more likely to harm both our trading relationships and our local – and national – economy.
As tariffs continue to unfold, WCIT – as part of our commitment to providing both insights and actions – had begun documenting the Washington industries most heavily affected. Keep your eyes on this space as our list continues to grow, and please let us know if your industry is facing new challenges due to new tariffs.
- Washington is known around the world as a top producer of apples, a status at risk with 15% and 20% tariffs coming from China and Mexico, respectively. Washington’s 1,300 apple growers supply up to $250 million worth of apples to Mexico each year, including lower grade fruit that is hard to sell elsewhere, while exports to China reach $50 million annually. China also imports $1.5 million worth of pears from Washington farms, causing a smaller yet still significant threat to our state’s fruit growers.
- China is Washington’s largest export market for cherries, a destination representing nearly 3 million cases and $140 million in sales every year. Washington farmers facing a newly-imposed 15% tariff will struggle with falling demand from higher prices and the lost costs if they can’t find new markets for their product – a critical issue right now as cherry season gets into full swing.
- NAFTA helped Washington potato growers establish a dominant foothold in Mexico, but a 20% tariff on potatoes and frozen potato products will raise prices and cut demand, especially as Canadian growers in Alberta, Manitoba and Prince Edward Island still benefit from favorable trading conditions. This represents a significant hit to Washington’s $750 million potato industry.
Wine, Beer, & Spirits
- Washington’s wine, beer and spirits industries are facing a triple threat impact of the trade war, with China’s 15% tariff on a variety of Washington wines, U.S. 25% and 10% tariffs on steel and aluminum, respectively, and Canada, the E.U. and China placing a 25% on American whiskey, a craft product for which Washington distilleries are beginning to be known for around the globe.
- Washington businesses exported over $1 million of wine to China in 2017 alone, up 30% from the previous year, making the country one of the most promising growth markets for what is already a $27 million export opportunity, and making Canadian wineries more attractive.