Sunshine state faces dark clouds from EU-U.S. trade conflict — Panjiva
Más

Supply Chain Research

Sunshine state faces dark clouds from EU-U.S. trade conflict

China 2968 Elections 121 European Union 823 Industrials - Aero/Defense 196 Materials - Chemicals 233 Materials - Metals/Mining 748 Metals - Aluminum 247 Metals - Copper 67 Trade Deals 999 U.S. 5314

The U.S. primary elections scheduled for Mar. 17 include potentially important battleground states for the general election for President due this November. As flagged in Panjiva’s research of March 10 the two front-running Democratic Party candidates for President – Senator Sanders and former Vice President Biden – have increasingly contrasted views on trade policy. Both will likely use the success – or otherwise – of President Trump’s record on trade going into the general.

While Illinois has been the biggest loser of the four states in terms of exports – Panjiva’s analysis shows exports fell 8.2% in 2019 versus 2017 to reach $4,703 per capita – it is not expected to be competitive in November with Florida and Arizona likely to be more important “swing states” according to Newsweek. The downturn in Illinois’ exports has been due to a 36.1% slide in exports of refined oil and a 75.2% drop in certain medical devices.

Trade may not be a fruitful area of debate for the Democrats in Arizona. Exports have climbed 18.0% in 2019 versus 2017 due to a 54.2% surge in shipments of copper ore and a 52.6% surge in exports of aerospace products including helicopters.

Florida meanwhile is balanced with a 2.1% increase in exports to $2,631 per capita masking an array of winners and losers.

ILLINOIS HAS LOST MOST OF THE MARCH 17 PRIMARY STATES

Chart segments U.S. global exports by state. Source: Panjiva

Panjiva’s analysis shows that, on the winning side has been a surge in global exports of aerospace products of 18.4% and a 62.4% jump in shipments of motorboats. The former likely includes operations by Embraer on the basis of Panjiva’s data for seaborne imports of products.

More recently on the losing side has been exports to China which fell by 34.4% year over year in 2019. That was led by a drop in shipments of scrap metals, including a 49.4% slump in exports of copper scrap in 2019 versus 2018 and 44.9% slide in aluminum in large part due to the earlier application of stricter regulations on Chinese imports of waste materials. 

Other commodities have declined due to Chinese retaliatory tariffs on U.S. exports relating to the trade war including a 23.3% slide in woodpulp products and a 29.3% drop in polyamide chemicals.

CHINA’S TARIFFS, SCRAP RULES LAY WASTE TO FLORIDA’S EXPORTS

Chart segments exports from Florida to China by product on a monthly and three-month average basis. Source: Panjiva

An area of policy sensitivity ahead of the elections will likely be trade with the European Union. Bilateral trade between the EU and Florida was worth $1,365 per capita in 2019, with imports having surged 17.1% higher and exports having fallen by 1.8%. By comparison trade with China was worth $652 per capita.

A potential trade war between the EU and U.S. cannot be ruled out, particularly given recent EU policy decisions regarding carbon border taxes and the increase in aerospace retaliatory tariffs by the U.S. due in mid-March. Additionally, Congresswoman Stephanie Murphy (D-FL-07) has been vocal in addressing Congressional oversight of Presidential powers. 

Once the EU launches its own aerospace related measures there is a potentially significant impact for Florida given aerospace represented $1.95 billion of exports to Europe in 2019, or 21.3% of the total – there’d already been a 14.2% slide in the past 12 months.

The application of additional U.S. tariffs will raise costs for consumers and businesses in Florida. The largest imports to Florida from the EU in 2019 were mid-size engine autos worth $1.76 billion and speciality chemicals (HS 2934) where major U.S. importers from the EU include BASF and Syngenta, Panjiva’s seaborne shipping data shows. Imports of luxury goods such as perfumes (down 11.0%) and liquor (whiskey down 1.0%, vodka off by 7.8%) have already declined in response to earlier duties.

CARS, CHEMICALS LEAD TARGETS FOR FLORIDA TARIFFS ON EU EXPORTS

Chart segments imports to Florida from the EU in 2019. Source: Panjiva

Copyright © 2024 Panjiva Supply Chain Intelligence, a product offering from S&P Global Market Intelligence Inc. All rights reserved.