Oregon imports vulnerable amid ongoing 'trade skirmish'
Oregon exports more goods than it imports, making it one of just 12 states that have a trade surplus, according to the "2019 Value of Jobs Oregon's State of Trade."
The report is produced by the Portland Business Alliance, Pacific Northwest International Trade Association, and the Value of Jobs Coalition, with research conducted by ECONorthwest.
Nearly 75% of the state's intermediate imports, which are raw materials or components used for production, are from Canada. Another 40% of Oregon's imports are from Mexico. These basic materials are imported and used as supply-chain inputs for products that are value-added and finished here.
For example, insulated wires from Mexico are used in manufacturing equipment designed and created in Oregon. Fertilizers imported from Canada are used to produce Oregon-grown crop commodities for sale abroad.
Even though Oregon is the largest lumber producer in the country and about 75% of all wood products made in Oregon are sold outside the state, Oregon also imports a lot of forest products from Canada and other countries, such as Honduras, to be processed in-state. Oregon imported about 158,000 metric tons of forest products in 2017, at a value of $17.5 million, according to the Port of Coos Bay.
Similarly, Oregon exports a significant amount of seafood — about 19,500 metric tons in 2017 at a value of $29 million to countries such as Japan, South Africa, Benin, and Nigeria. That same year, it imported 12,000 metric tons of seafood with a value of $64.8 million, mostly from India, China and Chile, the Port reported.
Oregon also imports a large amount of grain, though it exports much more. In
2017, it imported approximately 18,900
metric tons at a total value of about $19
million from India, China and the United Kingdom.
Josh Lehner, a senior economist with
the Oregon Office of Economic Analysis, has repeatedly addressed the potential
impacts trade tariffs, both imposed and
proposed, could have on the state's imports. The primary reason, he explained, is that Oregon has many integrated, global supply chains and that while goods-producing
industries rely more upon imports than
other sectors, every industry imports something.
Among the Oregon sectors that could be impacted most are imports of automobiles. The Port of Portland's Terminal 4 houses a vehicle distribution center leased and operated by Toyota Logistic Services Inc. Since 1971, Toyota has been a fixture at Terminal 4, handling more than 10,000 vehicles per month. Dockworkers and others in the auto supply chain process the imports in Portland before they are sent to dealerships across the country.
"The trade skirmish is here. Tariffs are raising the prices of some imported goods and will curtail some exports as well," Lehner wrote about the potential impacts to Oregon. "To date, these actions have had a minimal macroeconomic impact, even if specific businesses and industries see larger changes. The real concerns lie with continued escalation that would eventually disrupt the global economic supply chains."
In the Oregon Office of Economic Analysis's 2019 economic forecast, Lehner noted that a broad array of international risks could impact Oregon's economy via its import market. These include Brexit; sovereign debt problems in Europe; equity and property bubbles in places like Canada, South America and Asia; political unrest in the Middle East and Venezuela; nuclear arsenal concerns with North Korea; and commodity price spikes and inflationary pressures in emerging markets.
In particular, China — now a top trade partner with Oregon for both imports and exports - has the potential for big impacts. The state of the Chinese economy, its real estate market and public debt burden, has spillover effects to the Oregon economy.
"Any economic slowing in Asia is a potential threat to the Pacific Northwest," Lehner said.
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