Step away from anti-business rhetoric in Washington and into the shoes of state and local leaders. One reality becomes clear: There is too much at stake for the United States to go on business alone.
Local leaders see evidence every day that, as a substantial portion of their workforce and economies depend on international trade and investment, it seems President Donald Trump is about to walk away.
A recent gathering of governors was proof that they had gone to Washington for their national winter meeting. Once there, he met with the leaders of different Australian states. Teams from abroad have come before, but this time it was different. It was the most senior Australian political and business delegation ever to visit the United States. He traveled 10,000 miles and accompanied Prime Minister Malcolm Turnbull, who was to deliver the keynote address.
Turnbull called for a deepening of US-Australian ties in energy, advanced manufacturing, civil and military aircraft, and more. He reminded us that we can accomplish more together than we can.
The feeling was mutual. “The Governor stands ready to enhance this important partnership,” announced Nevada Gov. Brian Sandoval, president of the National Governors Association. Governors subscribe to these guiding principles because they see the benefits of living by themselves as directly as they see the costs of going away.
Check out the state level figures and it’s not hard to see why states want to keep it that way. A substantial share of all state workforces are associated with trade and investment.
political cartoon on economy
On foreign direct investment, the largest states attract the largest amount. But the states with the largest shares of total private industry employment by foreign-owned companies are a diverse group: New Jersey (8.1 percent), South Carolina (8.0 percent) and New Hampshire (7.7 percent), followed by Kentucky, Indiana, Hawaii, Connecticut and Delaware (more than 7 percent each).
Every state has a story. Take Texas. Foreign-owned companies employ 544,800 Texas workers, which is 5.5 percent of the state’s private workforce. The importance of trade agreements and cooperation is also evident: 62 percent of the state’s exports go to various U.S. FTA partners, and since 2006, Texas exports to these partners have increased by 60 percent.
Trump’s frustration and concern over Chinese trade policies is understandable. But that’s not enough reason to withdraw the United States from current and other promising trade talks that could open up new market opportunities for American businesses. Instead, Trump needs to find a way to deal with China that will work for all, and that means uniting with like-minded allies, who are just as frustrated.
The Trans-Pacific Partnership offers a way to tackle the problem. The agreement includes stronger new rules on state-owned enterprises and effectively establishes a new rule book that will limit China’s ability to continue aggressive behavior.
Recent comments by the president and his Treasury secretary indicate that there may be a possibility to rejoin the TPP, which is good, as it is Trump’s ticket to effectively dealing with China. Conversely, unilateral solutions like import taxes, which are clearly within the president’s authority, slow growth and end up doing more harm than good at home. Worse, as history shows, import taxes will not change China’s behavior.
State and local leaders are our eyes and ears on the ground, and their message is clear: Workers and businesses in their communities depend on the free flow of trade and investment across borders. Our allies are saving a seat for us at the TPP table. Trump needs to accept the bus ticket and then use it wisely.