Despite any White House rhetoric, trade relations between South Carolina and Canada have never been better.
Perrin Beatty, president of the Canadian Chamber of Commerce, was in the Palmetto State recently to meet with Commerce Secretary Bobby Hitt and Gov. Henry McMaster regarding the trade relationship between South Carolina and Canada.
“We had the opportunity to talk about why the trade is so important, the money involved and the jobs created,” Beatty said in an interview with GSA Business Report.
According to the Canadian government, the value of South Carolina exports to Canada was $3.5 billion in 2016 with imports from Canada valued at $2.9 billion. The state exported $473 million in services to Canada during the year.
Another part of the relationship, according to Beatty, was tourism. In 2016, 753,500 Canadians visited South Carolina which equaled $335 million in vacation spending.
“If you were in Myrtle Beach today, you would have trouble not bumping into a Canadian,” Beatty said.
The visit to South Carolina came on the heels of the Trump administration imposing a “preliminary anti-subsidy duty” on softwood lumber coming out of Canada. According to Forbes.com, the average duty on lumber imports is 20%.
President Donald Trump tweeted the day after Beatty was in South Carolina that “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!”
The preliminary duties were a response to Canadian officials “restricting imports of U.S. highly filtered milk protein products” used mainly to make cheese, according to a report from Reuters.
“The most important thing is not to respond to the most recent tweet and to respond to facts,” Beatty said.
He added that Canada and the United States do $1 million in business each minute of every day and there are 9 million jobs tied to the connection between the two nations. In South Carolina, there are over 165,000 jobs that depend on trade and investment with Canada, according to the Canadian government.
The largest industries exporting from South Carolina to Canada are transportation (29%), equipment and machinery (26%) and plastics and rubber (19%). The value of automobiles exported to Canada from South Carolina in 2016 was $650 million while rubber and rubber articles were valued at $487 million.
Conversely, Canada exported $215 million worth of wood pulp products to South Carolina along with $470 million in rubber and rubber parts in 2016.
“It is different than just selling stuff to each other. There are supply chains and we are competing against areas like Asia in that respect,” Beatty said. “We are in this together and we should be looking at what we can do to strengthen the relationship.”
In 2006, the American and Canadian governments brokered a deal that set aside years of litigation between the two over timber. Former U.S. ambassador to Canada David Wilkins said the potential uptick in rhetoric could have a negative impact on homebuilders nationwide.
Wilkins, who was appointed by President George W. Bush in 2005 and served as ambassador to Canada until 2009, is an attorney with Nelson Mullins Riley & Scarborough LLP in Greenville.
“If you put a tariff on goods coming into the country, you are going to raise the price,” Wilkins said. “Right now, about a third of our timber to frame houses comes from Canada.
“It’s about share and in negotiating, the U.S. timber industry wants that to be lower and the Canadian industry wants it to be higher.”
Trade rhetoric hits just as talks surrounding a renegotiation of the North American Free Trade Agreement begin to heat up. Forbes.com and Reuters reported U.S. Commerce Secretary Wilbur Ross said talks on NAFTA “are expected to begin later this summer after a 90-day legal consultation period.”
According to the Office of the U.S. Trade Representative, manufacturing exports to Mexico and Canada have increased 258% since the inception of the agreement and the U.S. carries a trade surplus with both nations.
This summer, Beatty said the talks have to have a starting point in order to ensure a positive outcome for all three nations.
“When Prime Minister Trudeau met with President Trump, there was discussion on modernization and there are ways to modernize things involved with NAFTA and that is the focus we should have, not destroying it,” Beatty said.