California pays high price for tariffs from US-China trade spat

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A hearing on the effects of U.S.-China trade dispute is held in San Francisco, California, the United States, July 17, 2019. [Photo/Xinhua]

California officials and lawmakers have voiced deep concern about the state's economy being affected by the U.S.-initiated trade disputes with China.

California pays dearly

Appearing before a hearing called by two California Assembly committees on China-U.S. trade tensions on Wednesday, California Lieutenant Governor Eleni Kounalakis said that rapidly changing federal trade policies are impacting California disproportionately "because of the size of the California economy and our inter-dependence on foreign trade."

"All of this is especially worrisome for the state of California," she said, adding that about 20 percent of employment in California is dependent on international trade and investment, equivalent to about 5.4 million jobs.

California is already feeling the impact of the U.S.-China trade frictions, she said, citing the figure of the U.S. Chamber of Commerce which showed that over 13 billion U.S. dollars of Californian exports are threatened by the tariffs.

"Exports to China from California ports were down nine percent year to date in 2019 compared to the first five months of 2018," she said.

In 2018, China was California's third largest trading partner, following Mexico and Canada, and Chinese investors are a leading source of foreign direct investment to California, according to official data.

Agriculture takes biggest hit

California's agricultural sector was the hardest hit by the U.S.-China trade disputes, with the biggest drop in exports to China, Phil Ting, chair of the Assembly Select Committee on Asia/California Trade and Investment Promotion, told Xinhua ahead of the hearing.

American wine exports to China have fallen by 25 percent, with 90 percent of the loss coming from California, since the U.S. administration escalated trade frictions with China by imposing steep tariffs early this year, Ting added.

"Obviously, we're very concerned about the tariffs that have been put in place over the last couple of years ... in particular tariffs on agricultural goods, which have a very negative impact on California, the largest agricultural-producing state in the country," he said.

These exports covered wine, fruits, vegetables and many other goods that are exported from California to China, Ting said.

"We've already seen a devastating effect in terms of exports to China," said the California Assembly leader.

During her hearing, Kounalakis listed the almond industry as an example, which generates about 104,000 jobs in California, and has seen a significant impact since last year with a decrease of about one third in American almond exports to China.

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