Chinese Tariffs Will Hit California's Most Vulnerable Counties Hardest

Calistoga, California

Calistoga, California

 

Connecting state and local government leaders

The Trump administration's escalating trade disagreement with China doesn't bode well for eight counties with high unemployment.

Eight of the 10 California counties most affected by China’s retaliatory tariffs on the U.S. had 2017 unemployment rates exceeding the statewide average of 4.8 percent, according to the California Budget & Policy Center.

On April 1, China imposed tariffs reaching 25 percent on 128 U.S. products, wine among them, in response to those set by the Trump administration on solar panels and washing machines in January and steel and aluminum in March.

While California’s large, diverse economy is generally less dependent on exports than states in the Midwest and South, “trade war” talk has only escalated since—highlighting struggling counties’ vulnerabilities, per the policy center’s analysis:

In imposing tariffs on products from China and elsewhere, the Trump Administration intends to protect and promote US companies and workers. So far, however, the Administration’s protectionist trade actions appear more likely to result in increased economic insecurity for workers in California, with the effects concentrated in communities that are already struggling economically. Given that California contributes far more to the national economy than any other state, both California and the US as a whole should be concerned about national trade policies that harm rather than boost California’s economy.
California Budget & Policy Center

President Trump floated $100 billion in additional tariffs on robotics, information technology and aerospace products as punishment for Chinese intellectual property theft, despite California tech companies coming out against them because of their workforce and market effects. Localities will feel those effects most acutely given time.

China remains California’s third-largest export destination overall with more than $16.4 billion in goods flowing there last year, and the state has more jobs in industries targeted by the retaliatory tariffs than any other: about 287,000.

After Napa County, where unemployment is low, Colusa County has the largest share of local jobs in jeopardy at 14.1 percent. Unemployment there was almost three times the state rate in 2017 at 14.3 percent.

Glenn, Sutter, Kings, Merced, Santa Cruz, Tehama, and Monterey counties subsequently have the most jobs in jeopardy and higher-than-average unemployment.

“Out of the full 17 counties where at least 5% of local jobs are in industries targeted by China’s tariffs, only five had unemployment rates that were at or below the state average,” reads the policy center’s analysis. “This means that the retaliatory tariffs from China can be expected to have the largest local impact on jobs and wages in parts of the state where jobs are already harder to find.”

Dave Nyczepir is a News Editor at Government Executive’s Route Fifty and is based in Washington, D.C.

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