There was a report out on Tuesday stating that countries from the proposed Trans-Pacific Partnership Agreement took away 112,500 jobs in Ohio last year. I am not sure how they arrived at that number, but it’s certainly conventional wisdom and it’s a major campaign issue on both sides of the aisle. In Michigan and Mississippi, a large degree of voters felt that the trade was economic and a job killer.
GOP Exit Polls |
|
Michigan |
55% |
Mississippi |
58% |
According to the Bureau of Labor manufacturing, jobs in Ohio declined from more than one million in January 2000 to 690,000 coming into 2016.
People are upset and are ready to take action via the ballot box. Of course, there are several factors attributed to manufacturing job losses:
- Strong Dollar
- U.S. Economy
- Foreign Trade Barriers
There are even more nuanced influences on trade deficits, but most economists agree that the most critical isn’t foreign trade barriers. It might be counterintuitive but some economists argue we shouldn’t desire trade surpluses. Be that as it may, when it comes to trade deficits, parameters that have been established that if violated will call for emergency action.
- 2005 Trade Deficit as % of GDP 4.1%
- 2006 Trade Deficit $558.5 billion
- 2015 Trade Deficit $39.8 billion as % of GDP 2.9%
Ohio Story
According to Business Roundtable, the benefits of trade for Ohio are immense, including the creation of 1.5 million jobs.
Ohio Exports |
Goods |
Services |
2013 |
$50.6 billion |
$13.4 billion |
Ohio Exports |
Businesses |
% Small-Medium |
2013 |
16,345 |
89% |
Ohio Exports |
Businesses |
% Small-Medium |
Canada |
$19.8 billion |
$1.4 billion |
Mexico |
$5.2 billion |
$575 million |
China |
$3.9 billion |
$867 million |
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A trade war would certainly jeopardize the benefits of exports to Americans in general- Ohio in particular. Lots of businesses, lots of workers, and lots of potential would be impaired.
Moreover, if we do enter a trade war, consumers are going to have to pay a lot for stuff such as TVs and toys, and this is going to hit the middle-class and the poor even harder. This is a small price to pay compared to potential job losses, but it’s something voters should consider.
Consumer Benefits of International Trade |
|
TVs |
-86.9% |
PCs |
-71.2% |
Toys |
-41.9% |
Every country in the world already has tariffs in place, so there is a role for them when it’s used wisely. However, against a backdrop of a flimsy global economy, the idea of reckless taxes and tariffs would have the exact opposite impact desired or advertised.
However, we undoubtedly need better trade deals, and perhaps we should consider ripping up things like NAFTA and not going with the TPP agreement.
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