Foreign trade tensions could put tens of thousands of SoCal jobs at risk
Nearly 430,000 Southern California workers earn a paycheck from one of the 10,378 foreign-owned company in the region, according to a new report published Friday by the World Trade Center Los Angeles. That's more than five percent of all workers.
But escalating tensions over trade could set back that foreign investment — and threaten many local jobs.
In the six counties covered by the report (Los Angeles, Orange, San Diego, San Bernardino, Riverside and Ventura) nearly 50,000 SoCal jobs are linked with companies owned by Canadian and Mexican investors — investors who see the clock ticking for NAFTA negotiators to come up with a new agreement by the end of the year.
Meanwhile, close to 16,000 SoCal workers are employed by Chinese-owned companies that could pull back from U.S. markets if the trade situation worsens. New tariffs imposed by the U.S. on foreign steel and aluminum have already prompted China to respond with its own tariffs on a host of American products.
President Trump may have put China in the spotlight, but China is still overshadowed by several countries, in terms of the amount of investment. Investors from seven other nations create more companies and more jobs here, according to the report, with Japan, the U.K. and Canada leading the pack.
However, Chinese investors do stand out for how quickly they've ramped up their SoCal investments. Between 2015 and 2017, the number of Chinese-owned companies in the region increased from 340 to 467 and the number of jobs linked to those companies increased by 147.6 percent.
"Rhetoric saying that international trade is killing jobs is not true, especially for the Los Angeles region," said Stephen Cheung, president of the Los Angeles World Trade Center.
He noted that while other countries have had a head start on investing in Southern California, China is starting to catch up. "In the past few years, I don't think there are any other countries that are investing as heavily into the Southern California region," he said.
Cheung said Chinese companies in SoCal are doing everything from constructing high-rise buildings in downtown LA to manufacturing electric buses for the LA Metro system. Chinese investors have created more jobs in wholesale trade than any other SoCal industry, moving American products through LA ports and on to China to meet demand from new middle class consumers.
"A lot of trade goes through this region. In Los Angeles, our vitality is really dependent on international trade," Cheung said. "The stakes are high."