Trump’s trade tensions with China could hurt California’s economy

Global Business

U.S. President Donald Trump’s proposals against China could have a negative impact on the economy of California.

CGTN’s May Lee explains.

Trump's trade tensions with China could hurt California's economy

U.S. President Donald Trump's proposals against China could have a negative impact on the economy of California. CGTN's May Lee explains.

Chinese investors poured $16.5 billion into California in 2016, more than any other U.S. state by far. This long-term love affair has resulted in a boost to the Golden State’s economy.

For years now, the National Association of Realtors said Chinese buyers have purchased more U.S. homes than any other foreign buyers. Trade also plays a major part in the boost to the economy.

“In 2016, about 159 billion dollars worth of goods traded with China and the U.S. They’re our number one trading partner, ” Stephen Cheung, president at World Trade Center Los Angeles said.

That massive trade supports hundreds of thousands of American jobs which could be at risk if U.S. President Donald Trump follows through on threats to slap tariffs as high as 45% tariff on Chinese imports. A threat, said UCLA economist William Yu, that Beijing should take seriously.

“They gradually realize this is a very different president. And he’s very serious about this trade issue. He’s very serious about making a short term, good direct deal for the United States,” Yu said.

Yu believes Donald Trump has more leverage, because China’s exports dwarf what it imports from the U.S. by around three to one.

California also could suffer in another booming area if relations sour – Tourism.

Last year, Chinese visitors to Los Angeles surpassed 1 million for the first time. In 2015, they spent $1.3 billion, more than in any other destination in the world. But if things get more heated between Beijing and Washington, especially over hot button issues like the One-China policy, visitors and business could drop, which could spell big trouble for one of the world’s largest economies.