November 19, 2018
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Maine expert worries Trump trade war with China could stunt exports

A top Maine trade expert said Thursday Chinese retaliation for higher tariffs proposed by President Donald Trump could have a “strong negative impact” on the state’s exports.

China is currently the second-largest export country for Maine, and unlike exports to No. 1 Canada, trade with China has grown significantly for the state in recent years.

[Trump orders up to $60B in tariffs on Chinese imports]

Concern over Maine exports came as Trump moved forward Thursday with threatened sanctions against China, directing his U.S. trade representative, Robert Lighthizer, to reveal a list of products that could be hit with higher tariffs.

Lighthizer is to announce the list within 15 days, after which there is a public comment period. The final list will then be made public.

The full impact on Maine is not yet clear, trade experts said.

China is second behind Canada as an export country for Maine. Canada led by a wide margin, taking $1.2 billion in Maine exports or about 45 percent of the state’s exports to that country. But exports to Canada declined almost 12 percent in value in 2017 over the previous year, according to U.S. Census data.

By contrast, Maine exported $238 million in goods to China, accounting for 9 percent of the state’s total exports, but that represented almost a 16 percent rise in value in 2017.

Taken together, European markets buy $455 million of Maine’s exports.

Top exports to China from Maine are paper at $110 million, fish (fresh, chilled, frozen) and other marine products at $57.4 million, and machinery at $14.7 million, according to the U.S. International Trade Administration.

“As you can see, many of these items are important to northern Maine, particularly the wood products, seafood/lobster and transportation/aircraft,” Janine Bisaillon-Cary, president of the Montserrat group, a trade consultancy, said. Bisaillon-Cary was also the former president of the Maine International Trade Center and state director of international trade.

“So any increase in tariffs in these export territories [China, Canada and Europe] would have a strong negative effect on Maine,” she said. “Also, machinery and food manufacturing are significant in the Midcoast, Down East and northern counties. The manufactured food would include blueberries, potatoes, value-added food products and vegetable (seaweed, kelp) extracts such as that produced by FMC/Dupont in Rockland.”

The president, whose comments were live-streamed on YouTube, referred to “China’s economic aggression” as the reason for the sanctions. The president’s move was reportedly because China has asked U.S. companies to reveal their technology secrets in exchange for doing business in China.

The tariffs could amount to up to $60 billion on Chinese goods, as well as limit that country’s ability to invest in U.S. technology.

“The end objective of this is to get China to modify its unfair trading practices,” Everett Eissenstat, deputy assistant to the president for international economic affairs, told The Washington Post.

Treasury Secretary Steven Mnuchin also is to create new investment restrictions on Chinese investors. Additionally, the president plans to file a formal complaint with the World Trade Organization and hopes allies in Europe and elsewhere will support his moves.

As the Trump administration’s sanction threats escalated in recent days, China’s commerce ministry said it would retaliate against new tariffs.

“China will not sit idly by and let its legitimate rights and interests be harmed, and will certainly take all necessary measures to resolutely defend its legitimate rights and interests,” the ministry wrote in a statement published by the BBC. That could include tariffs against U.S. agricultural exports, which would hit Trump’s strong support base in Farm Belt states, according to the BBC.

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