On Friday, Ohio Governor John Kasich joined a bipartisan group of political and business leaders at the White House to talk about the importance of passing TPP this year. Kasich also penned an op-ed in the Wall Street Journal, which noted:
With 40 million American jobs dependent on trade, the U.S. economy is already interconnected with the rest of the world. So TPP is not about something “new” as much as it is about helping existing U.S. companies—large and small—find growth opportunities in Japan, Australia, Canada, Chile, Malaysia, Singapore, Vietnam and four other Pacific Rim nations that want to increase trade with America.
There is little doubt that Ohio is an export powerhouse and that the TPP countries are very important export markets. According to the Business Roundtable:
- Ohio exported more than $30 billion in goods and services to TPP countries in 2014;
- TPP countries accounted for nearly 60 percent of the State’s goods exports, and
- U.S. trade – exports and imports of goods and services – with TPP countries supported about 560,000 jobs in Ohio.
The last bullet contains a key, but often overlooked, point: those 560,000 jobs in Ohio rely on exports and imports. And the TPP provides significant potential benefits for the Ohio companies that import from TPP countries, their workers, and their customers.
In 2015, the United States collected an estimated $357 million in tariffs on imports into Ohio from the TPP countries with which the United States does not have an FTA already (i.e., Brunei, Japan, Malaysia, New Zealand, and Vietnam). That is nearly $1 million per day. Among all states, only imports destined for California and New Jersey paid more.
Much of the tariffs were assessed on apparel from Vietnam, but a number of industrial products used by U.S. manufacturers also faced millions of dollars in tariffs. For example, Ohio imports of:
- wire harnesses – the electrical connectors that make auto blinkers blink and windshield wipers wipe – from Vietnam alone faced about $5 million in tariffs;
- machining centers and lathes – factory equipment used for metalworking by American manufacturers – from Japan faced $5 million in tariffs, and
- the windshield wipers and blinkers mentioned above from Malaysia faced nearly $500,000 in tariffs.
The TPP would eliminate each of those tariffs immediately, making products manufactured in Ohio with those parts that much more competitive in global markets. Products accounting for about half of the tariffs paid ($177 million) on Ohio imports from new TPP countries would get immediate duty-free treatment under TPP.
For those gains to occur, Congress must first pass TPP. Kasich summed up the choice facing Members of Congress later this year:
Saying “yes” to TPP makes possible the economic growth American businesses and their employees want and need. Saying “no” is not a neutral or beneficial move—far from it. Turning down TPP slams the door on a way forward for job creation, and it will have a choking effect on the jobs, companies and communities that are now sustained by trade.
This is particularly true for jobs, companies and communities in Ohio with strong trade ties to the TPP countries.
If your company would benefit from U.S. tariff cuts under TPP, please add it to our free TPP importers list here. You can learn more about potential TPP import benefits here.