Swing your partner
Trade relations between the United States and China can be found deep in the heart of Texas. The Lone Star state surpassed California as America’s largest local exporter to the People’s Republic last year, mostly due to fossil fuels pumped in the state’s western region. While Washington and Beijing inflame tensions, regional economic ties are strengthening.
Texas exported $17.5 billion worth of goods to China last year, a more than 60% increase from 2019, according to the U.S. Census Bureau. Mexico is still the top trading partner for the state but commerce with the People’s Republic is growing. A trade war, started by former U.S. President Donald Trump, sent exports from Texas to China down 34% from 2018 and 2019.
The state’s business and local leaders are working to strengthen economic ties. Now that the pandemic is easing, international delegations to the area, including from China, are in the planning stages, according to Susan Davenport, chief economic development officer at the Greater Houston Partnership, a group that includes leaders from many multi-national oil firms. She also noted that the nation’s tech hub, Shenzhen, is a sister city. The Houston-Galveston customs district, which includes seven ports, counts the Middle Kingdom as its top trading partner.
Washington has gone the other direction. On Tuesday, U.S. President Joe Biden announced a “strike force” that will target factors that have hurt the supply chain, with tariffs as a possible punishment. Meanwhile, the Senate is poised to vote on a $250 billion bill aimed at better competing with China on advanced technologies.
The tensions obscure the important role that trade with China plays in local U.S. economies. Exports made up about 17% of Texas’s gross state product. That’s why a full-blown economic cold war is dangerous. While Washington imposes sanctions and other penalties on the People’s Republic, states like Texas have to work overtime in the unusual role as diplomat.