President Donald Trump formally withdrew the United States from the Trans-Pacific Partnership on Monday. The 12-nation deal had been negotiated under President Barack Obama.
Congress had not had the chance to ratify the agreement, so nothing will change in the short term; but the withdrawal’s long-term effects could impact South Carolina.
The Trans-Pacific Partnership was set to lower trade barriers and make it easier to trade within the 12 countries represented. Darla Moore School of Business economist Bill Hauk said while this move has no immediate impact, it could set a precedent.
“If other countries believe that this is a pattern, then they may be uneasy making any future deals with the United States.”
Despite China’s not being a part of the original plan, the door has been opened for that country to take the United States’ place in the Trans-Pacific Partnership, or draft an alternative trade agreement.
China is South Carolina’s No. 1 trading partner. The state has several Asian-owned factories, as well as importing and exporting in Charleston.
“If there are tougher barriers on trade, then prices will go up,” Hauk said. “South Carolina benefits from foreign investment, but if it is too expensive, the companies will look to move to other places.”
Hauk said the withdrawal could make South Carolina a less attractive destination for multinational businesses, and businesses already within the state could import and export less products, causing higher consumer prices.