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Honorable Mark Sanford

Representing the 1st District of South Carolina

Op-Ed: Look around President Trump, South Carolina is a trade success story

Jun 26, 2018
Blog Post

Look around President Trump,
South Carolina is a trade success story

By Rep. Mark Sanford

President Donald Trump will receive a warm welcome from state Republicans on Monday when he travels to South Carolina to endorse Gov. Henry McMaster. His trade policies shouldn’t.

In fact, South Carolina might just be the perfect example of what trade deals and foreign investment can do for a state’s economy. Over the past 20 years, South Carolina has become an auto manufacturing center — outpacing powerhouses like Michigan — with plants employing tens of thousands churning out BMW, Volvo and Mercedes-Benz vehicles along with billions worth of Continental and Michelin tires and other parts.

The Spartanburg BMW plant alone employs more than 8,000, while investments by Michelin and BMW have transformed Greenville. These plants have made South Carolina into the nation’s No. 1 car exporter with more than $10 billion worth of vehicle exports passing through the Port of Charleston annually.

That success story is largely a function of the president’s favorite punching bag: the North American Free Trade Agreement. Granted, NAFTA is a 25-year-old agreement, and many provisions are in need of an update for the internet age.

But a wholesale withdrawal from the agreement, as President Trump has repeatedly threatened, puts South Carolina’s economy in an extremely precarious position.

The reason those auto companies can build manufacturing plants and create jobs here is the efficient, well-integrated North American supply chain that NAFTA created. The landmark trade pact attracted all sorts of companies to set up plants in the U.S., where they could have access to Mexican parts, American know-how and skilled labor, and Canadian raw materials along with tariff-free access to the massive North American market.

With NAFTA, North America can easily compete against the other big regional manufacturing powerhouses of the world: East Asia and Europe, which also have large regional markets and tightly integrated supply chains.

Without this integrated regional market, American companies would struggle to compete — which is exactly what happened in the 1970s and a ’80s when the U.S. faced vicious competition from Japanese companies using well-integrated East Asian supply chains.

The impacts of trade in this state go well beyond cars. South Carolina receives more foreign direct investment per capita than any other state in the nation. Similarly, our state’s economy is the fifth-most reliant on imports and exports in all 50 states. Trade with Mexico alone totals more than $5.5 billion and supports more than 70,000 jobs.

Attacking NAFTA and imposing harmful tariffs on steel, aluminum and potentially automobiles — as the administration has suggested — doesn’t just threaten to raise prices for the basic staples of life; it threatens the economic bedrock of our state.

Targeting German cars and Canadian steel with heavy tariffs doesn’t make us safer, as the administration has claimed, but it will make it much costlier for foreign companies to do business in South Carolina and less likely for them to invest more in our state.

Tariffs are taxes. When we raise tariffs, we raise taxes. Moving forward here would raise the cost of things we need and, more significantly, undo all the good the administration has done in helping Americans to have a job. Increasing taxes would undo the administration’s great work in lightening the regulatory and tax load for small businesses.

Already the European Union, Canada and Mexico have retaliated against steel and aluminum tariffs. What’s come as a consequence in products that range from Zodiac Boats in Summerville to Resolute Forest Products outside Rock Hill is that the prospect for jobs in South Carolina is being hurt.

The expansion of the Port of Charleston and the planned Jasper Ocean Terminal are emblems of South Carolina’s success story with international trade. Punishing the countries that made our state’s exporting power possible will hurt them and, more significantly, will hurt us. We always need to remember, a tariff is indeed a tax — on us.

President Trump would do well to look around closely during his visit. He will find that South Carolina doesn’t need trade protectionism or harsh import taxes that raise prices for families.

It needs opportunity. Free trade agreements and healthy trade relationships with allied nations give us that opportunity. They make us stronger. And the economic success story we have all seen firsthand is living proof of the importance of remembering, “If it isn’t broken, don’t try and fix it.”

Rep. Mark Sanford, a Republican, represents South Carolina's first congressional district.