We need free, but fair, trade with other countries. However, once a country has overwhelming trade surpluses each month, each year against another, it will not last. Nor should it. No country can tolerate such a state of trade, for its own self-survival.
But this is where we are with our current trade agreements with China.
China is a textbook example of why trade deals need to be renegotiated. The world is competing against China, a country where factories run seven days a week, worker conditions are poor and pay is paltry, especially when compared to most other industrialized countries. Some commentators and politicians have said recently that they oppose tariffs being imposed against China because consumer goods may get more expensive.
But if we don’t renegotiate our trade deal with China now, it will become even harder to do so in the future.
I applaud President Trump’s efforts to force China to the negotiating table to open up its markets to American products and services. The process of negotiating with China must be painful in forcing it to open up their markets to our products. Additionally, stopping Chinese intellectual-property theft (which has reportedly occurred for decades) is also a high priority in these negotiations.
In 2018, we had a $400 billion trade deficit with China. That means our country bought $400 billion more in products from China than China bought from the United States. In 2017, that number was $375 billion. In 2016, it was $347 billion and, in 2015, it was $375 billion. You get the picture. The doors to China’s markets are closed, yet China wants to sell its goods in the United States. This is not acceptable.
Why did our country wait so long to re-negotiate the China trade pact? How could previous U.S. presidents have tolerated this trade imbalance? The more our country exports, the more American jobs are created here at home. For the long term, I would rather have our country go through a period of rising prices for Chinese goods while negotiations are taking place than continuous and, perhaps, whopping trade deficits and continuing losses of American jobs because China is not opening up its markets to American imports.
As the president and CEO of the Florida Bankers Association, I care that our country has a strong and vibrant economy. Banks are at the core of the free-enterprise system. The banks are a major provider of capital to create homeowners and business owners, who make our economy go. Free and fair trade is important to banks since because they provide the capital to companies that import and export.
As the third largest state in the nation, Florida has many quality and good paying jobs that are created by the exports that leave from our ports and airports — whether they are manufactured in Florida or elsewhere. Exports are good for our economy; free and fair trade will only increase the trade numbers that detail Florida’s trade:
-In 2018, Florida exported $57.2 billion in goods to the world.
-In 2018, Florida was the eighth-largest state exporter of goods in the United States.
-In 2016, 232,253 U.S. jobs were supported by goods exported from Florida.
-In 2016, 58,104 companies exported goods from Florida — 95 percent were small and medium-sized companies.
In addition, Florida plays an important role when it comes to our neighbors to the south and north, providing products such as computers and electronics, transportation equipment, primary metals, machinery and chemicals:
-In 2018, Florida exported $7.1 billion in goods to Canada and Mexico, accounting for 12 percent of this state’s total exports to the world.
-In 2018, Florida was the 20th-largest exporter of goods to Mexico and Canada.
-In 2018, Canada was Florida’s second-largest export destination, and Mexico was the third-largest export destination.
These trade statistics make the clear and convincing case that we need to negotiate trade agreements with China and other countries. The status quo is not acceptable any longer. Ballooning trade deficits with China and others result in the loss of well-paying American jobs. Yes, trade is important, but it must be fair trade.
Alex Sanchez is president and CEO of the Florida Bankers Association.