David Dodwell says by zeroing in on the trade imbalance between China and the US, Trump is ignoring the huge potential for US exports in services such as tourism.
For example, look where these services exports come from. Over US$290 billion of services exports (about 40 per cent of total services exports) came from tourism – 76 million foreign tourists visited the US in 2016, underpinning close to 10 million jobs. China is today the source of more international travellers than any other country – more than 150 million last year – and this total is growing at more than 5 million a year. In 2016, just 3 million of these travellers went to the US – but they spent US$33 billion, by far the highest per capita spending of any country worldwide, according to the Germany-based China Outbound Research Institute.
At this rate, attracting an extra 1 million Chinese visitors would lift US tourism exports by US$11 billion a year. Add 10 million over the coming decade – not an unreasonable target – and this amounts to services exports worth an extra US$110 billion a year, adding literally millions of new jobs in the US. By poisoning relations with China, Trump’s trade war is putting much of this potential at risk: imagine how easy it is for China to suddenly make it harder to get US visas.
It is intriguing that Trump is so keenly obsessed with US goods exports to China worth US$130 billion a year, while wholly neglecting the upside potential of tourism and other services worth twice as much.
PUBLISHED : Saturday, 25 August, 2018, 4:01am
UPDATED : Saturday, 25 August, 2018, 6:58am
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