China gets most of the public attention when it comes to the impact of the ongoing tariff wars on U.S. trade markets. A new report by the Washington Council on International Trade (WCIT) warns, however, that the state’s economy also could be seriously dented by the impact of tariffs on trade with India, which now ranks as Washington’s 10th largest export market ― with tremendous future growth potential.
The report, “India: Washington’s Next Great Trading Partner?” reveals that India’s economy, now the seventh largest in the world, is expected to expand at a faster pace than China’s over the next five years.
“With China trade issues and the proposed new trade agreement with Canada and Mexico getting most of the headlines, it has been easy to lose sight of India’s importance to Washington’s economy,” WCIT President Lori Otto Punke says. “From aircraft to apples, India is one of the most vibrant growth markets for Washington state exporters.”
For Washington, that trade flow has a potentially huge upside, given the state already has the fourth-highest level of exports to India among U.S. states, trailing only California, New York and Texas. Among the major exports to India from Washington are aerospace products, fruit and nuts, vegetables as well as optical and medical devices.
“Aircraft sales in 2018 more than doubled over 2017 exports,” the WCIT report states. “Excluding aerospace products, Washington exports to India have risen steadily, increasing from $246 million in 2008 to $448 million in 2018.”
Washington also imports numerous products from India, including electrical machinery, textiles, cosmetics and precious stones, and a huge volume of frozen shrimp ― some $30 million worth annually. In 2018, the value of combined export and import trade with Indian moving through Washington’s ports totaled $2.3 billion ― with most of that, some $1.8 billion, being exported goods.
The ongoing global trade wars, however, threaten to put the brakes on the expanding trade between India and Washington, according to the report. In the wake of the U.S. tariffs being imposed on steel and aluminum imported from India and other countries, India this past June imposed a 20 percent tariffs on U.S. apples and 10 percent tariffs on chickpeas and lentils ― three of Washington state’s largest exports to India.
“Washington state has a great opportunity to enhance its economic ties with India in the years to come,” Otto Punke says, “but that opportunity could be undermined if tariffs from both countries get in the way.”