By Christine Ross
(July 25, 2018—ANNAPOLIS, Md.) For nearly three weeks now, the implementation of United States tariffs against China, Canada and a number of European trading partners has burgeoned to directly impact many businesses nationwide—Maryland included.
We have spoken with a number of business owners and operators across our state who rely heavily on global trade. Many of them are beginning to experience the effect of higher costs or decreasing revenues as a direct result of these trade wars.
On Maryland’s Eastern Shore, soybeans consume the most acreage of any crop grown. In 2017, data indicates soybean sales brought in over $200 million. China, the world’s largest importer of the legume, imposed a 25 percent retaliatory tariff on soybean imports. Already the local market has evidenced a roughly two dollar drop in the sale price for local farmers, tied in large part to the global price effect China’s tariff on soybeans has caused.
Maryland is home to a number of spice, sauce and condiment manufacturers. U. S. Chamber figures indicate in trade with Canada alone, those Maryland businesses annually export nearly $11 million of these products. Canada’s retaliatory tariff of 10 percent on these goods portends a threat to those businesses’ revenue projections, especially the smaller manufacturers.
Steel (25 percent) and aluminum (10 percent) tariffs present another threat to many of the manufacturers with operations in Maryland, several of whom import specialty metals unique to their production. One manufacturer of specialty cans requires a specific type of steel for production. That steel is now faced with a tariff cost that threatens not only the ability of the manufacturer to produce a quality product, but their client base itself. A continued lack of quality product at an affordable price could force its clientele to a cheaper, foreign manufacturer, resulting in the loss of jobs.
Finally, one of the biggest potential impacts this trade war could have is on Maryland itself. The U.S. Chamber has noted that over 812,700 Maryland jobs are supported by global trade. The Port of Baltimore is one of the largest, most viable port operations on the east coast and throughout the United States, employing directly and indirectly nearly 34,000 people (“The 2014 Economic Impact of the Port of Baltimore”, Martin Associates, Inc. 2015.)
In 2017, the Port set a new cargo record, handling 10.7 million tons of general cargo and the most containers and autos in its history. China is the Port’s second-largest customer, with the Port receiving nearly $5.1 billion in trade from them directly. The potential negative impact to the Port, its employees and the state of Maryland’s revenue is substantial.
Whether it’s soybean farmers on Maryland’s Eastern Shore, spice manufacturers across the state, manufacturers in need of metals or everyone who depends on the Port of Baltimore, there is a growing concern that the longer this trade war continues, the stronger the chance that businesses, their employees, their customers and their fellow Marylanders, will suffer.
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