Trade war? Chinese retaliation to Trump tariffs would hit Ohio hard. Five things to know:
The brewing trade war between the U.S. and China threatens many of the largest exports from Ohio and the Cincinnati area – and could deal a devastating blow to some of the area's largest employers.
China vowed on Friday to fight the U.S. “at any cost” after President Donald Trump proposed slapping an additional $100 billion in tariffs on Chinese goods in an escalating trade dispute between the world’s two largest economies.
Trump’s surprise move Thursday to instruct the U.S. trade representative to consider the additional tariffs came a day after Beijing announced plans to tax $50 billion in American products, including soybeans and small aircraft, in response to a U.S. move this week to slap tariffs on $50 billion in Chinese imports.
More:Trump escalates trade war with $100 billion in proposed new Chinese tariffs
Five things to know about China trade with Ohio
1. China is Ohio's third-largest trade partner, receiving about $3.9 billion in annual exports from the Buckeye State in 2017. Ohio's Top 5 trade partners in order of export value: Canada ($18.9 billion); Mexico ($6.5 billion); China ($3.9 billion); United Kingdom ($2.1 billion); Brazil ($1.4 billion).
2. China is Ohio’s most important soybean export market, so a tariff on American soybeans likely would drive down crop demand and the price Ohio farmers receive for the crop. “A 25 percent tariff on U.S. soybean exports to China not only will have a devastating effect on every Ohio soybean farmer, but it will also hurt every Ohioan who relies upon a healthy rural economy,” said Scott Metzger, a Ross County soybean farmer and first vice president of the Ohio Soybean Association.
3. More than 190 Ohio companies, including Cincinnati-based P&G, operate in China. Those companies won't be taxed on many of the wares they sell to the Chinese that are made in the country. But Procter & Gamble, for example, exports other items to the Chinese market that are made in the U.S. and would be subject to the tariffs on items like electric toothbrushes. "P&G is a global company, and we manufacture close to the consumers we serve around the world,'' Jennifer Corso, a global communications manager at P&G, said in an email. "It's too early to tell, so we're not in a position to comment on potential impact'' of the Chinese tariffs.
4. Locally, Cincinnati is the 11th-largest metro area exporter in the country and is the top metro area for exports in Ohio with more than 96 percent of local manufacturers shipping overseas. The total value of goods exported from the Cincinnati area: $26.3 billion in 2016.
5. Ohio’s largest export categories include motor vehicle parts, transportation equipment and aircraft engines and parts. That means Evendale-based GE Aviation, which makes jet engines, turbines and other aerospace equipment, could be among the Ohio companies most vulnerable to the Chinese tariffs. "In this environment of trade war, material inflation and a slower economic cycle, this is a company that 's going to have a lot of challenges going forward,'' Rob McCarthy, an equity analyst who follows General Electric - GE Aviation's parent - said during an appearance on CNBC.
Source: U.S. Department of Commerce's International Trade Administration
Associated Pres contributed.