All Local Veterans’ Week on Q13 News

State could see higher consumer prices, job losses if US-China trade war escalates

SEATTLE -- The United States and China are in a trade war, and consumers are caught in the middle.

“Consumers will generally lose out, prices will go up,” UW Professor David Bachman said.

After President Donald Trump's administration imposed a $34 billion tariff on Chinese goods, China retaliated with the same amount.

Bachman, a professor of International Studies at the University of Washington, said Friday that China's move could hurt Washington more than any other state.

“Most trade-dependent state in the country ... exports and imports are a much larger share of the state's overall economy than any other state in the union,” Bachman said.

China is coming after a lot of food that Washington state produces -- putting tariffs on some fruits and vegetables, seafood and beverages.

On the flip side, the United States is targeting some of China's technology, industrial machinery and medical devices.

“It's going to hurt our farming economy and, ultimately, Washington state economy, a lot of lost jobs,” former Washington Gov. Gary Locke said.

Locke is also a former ambassador to China and he said both countries have to lower the rhetoric.

He said Washington's apples and cherry exports could see a slowdown because China slapped tariffs on them.

Other things now more expensive to sell to China include whiskey, salmon and cars.

“In a trade war there are no winners, only losers,” Locke said.

But Bachman said consumers don't have to worry about prices going up immediately. Bachman said the real threat to consumers and the economy will come if the trade war is prolonged with extra tariffs.

“It can get much worse if we continue to impose tariffs on each other,” Bachman said.

Bachman fears companies like Boeing could be next. Outside of U.S. companies, Boeing gets the most business from China. In addition to Boeing, there is an abundance of tech companies like Amazon and Microsoft and the retail industry to keep an eye on.

“Places like Costco, Eddie Bauer, REI are importing many of their products from abroad,” Bachman said.

Bachman said the long-term goal of the Trump administration is to move manufacturing jobs to the United States, while also going after China for stealing intellectual property.

“The Trump administration is trying to get China to agree to a fundamental change on what it’s doing,” Bachman said.

But Bachman said many are questioning whether a trade war is the answer.

“It’s not that there are no complaints about what China is doing, it's about whether this is an effective way to deal with these problems,” Bachman said.

The Washington Apple Commission said the 2017 -2018 apple sales are almost complete so this year’s impact when it comes to consumer prices may not be an issue but the problem is for next year’s exports.

They say China is the No. 6 export destination for Washington apples, taking in over 1,000,000 bushels in the 2017-2018 season.

With the latest 25% tariff imposed -- in addition to other tariffs -- the apple industry says the total tariff for them is at 50% now.