Mississippi has a more than $3 billion trade deficit with China, meaning we buy far more from that nation than we sell to it.
That means President Trump’s trade war won’t have much of a negative effect because relatively few Mississippi companies sell there, and it might help Mississippi manufacturers who will have a price advantage against China. That will be at the cost of regular people paying slightly more for Chinese goods.
In the big picture, that’s a tradeoff I’m willing to accept. China has walked all over the United States for too long because we’re addicted to buying things it can make cheap because of how much less it pays laborers, and it’s time for a correction toward U.S. manufacturing.
Not making things here any more has hurt our national morale and taken away jobs from uneducated workers in rural areas, which whether we want to admit it or not describes an awful lot of Mississippians. Not having manufacturing jobs has contributed greatly to the erosion of people and leadership from small communities like Columbia that make up the backbone of our state.
So when Trump announced $200 billion in tariffs against China this week, which will start with a 10 percent tax on about half of the goods imported from China and then increase that tax rate to 25 percent by the end of the year, I wondered how it would affect us in Mississippi.
The U.S. Census Bureau has a tool called USA Trade Online that shows how much each state buys and sells with any foreign country. Mississippi imported $3.8 billion from China in 2017 but only sold about a fifth of that amount there, $787 million.
Here are the top five categories for imports (or in Southern vernacular, “Stuff we buy in Mississippi that has ‘Made in China’ written on the bottom”):
- Electric Machinery (like TVs and speakers): $1.6 billion
- Nuclear Reactors, Boilers, Machinery etc.: $843 million
- Furniture and Bedding: $362 million
- Plastics: $111 million
- Tools/Cutlery: $102 million
And here are exports:
- Optic, Medical or Surgical Instruments: $118 million
- Soybeans: $109 million
- Cotton: $107 million
- Nuclear Reactors, Boilers, Machinery Etc: $105 million
- Wood Pulp: $99 million
You can see from those lists that it’s overwhelmingly in favor of imports. For example, Mississippi buys twice as much in just one category — electronics like TVs — than it sells of everything combined.
The only groups that sell significantly to China appear to be Delta farmers who grow soybeans or cotton. But that $109 million, although significant, made up only about 10 percent of the state’s $1.1 billion soybean crop in 2017. Farmers can find other markets or grow other crops.
The biggest threat, then, from the China trade war for Mississippi is higher prices on everyday purchases. For example, earlier tariffs knocked the price of washing machines up 16.4 percent from February to May.
In general I don’t like tariffs and the inefficiencies they create. If I want to sell something I make to someone who lives in a foreign country, that should be between me and him to settle on price. It makes little sense usually to tax that transaction just because it involves a buyer and seller in two different countries.
Yet these circumstances, 25 years of the U.S.’s weak manufacturing economy while China has grown rapidly while being hostile to democratic ideals, make it worthwhile to claim a strong negotiating point against what has become our chief rival on the world stage.
Charlie Smith is editor and publisher of The Columbian-Progress. Reach him at csmith@columbianprogress.com.
