International trade between Los Angeles and its sister cities is feeling the negative effects due to the U.S.-China trade war.
One such sister city is Guangzhou, China. A sister city is a long-term diplomatic partnership between two cities that facilitates cultural exchange, economic cooperation and professional development, among other benefits. Cities in these relationships host events, such as social banquets and cultural fairs, so that members of both communities are able to understand each other on a more direct and personal level. Los Angeles and Guangzhou’s relationship has lasted for nearly four decades since co-signing a contract in December 1981.
Guangzhou, like its sibling, is a port city that serves as a trading and transportation hub, but the similarities don’t end there.
“The climates are very similar, there’s a lot of sunshine, and people are nice and welcoming,” said Mike Ma, a freshman studying mechanical engineering and Guangzhou native. “The people are very [open] to different cultures, similar to Guangzhou. You have a wide range of food you can choose from too.”
While Ma was not previously aware that his hometown was a sister city to Los Angeles, he says in retrospect that the relationship “makes a lot of sense” due to their status as international trade hubs.
Since President Trump accused China of unfair trade practices last year, the U.S. and China have been exchanging retaliatory tariffs on billions of dollars of each other’s goods. Brian Peck, a professor in the Gould School of Law and an expert in international trade, said the trade war affects both cities as Guangzhou is a major exporter and Los Angeles is a major importer.
“We’ve already seen a sharp decline in Chinese investment in L.A.,” Peck said, “Some of it is due to trade war, some of it is due to the general economic situation.”
Peck noted that the trade war most immediately affects citizens in both cities whose jobs relate to international trade, such as those who work at ports or in the shipping sector. But if the tariffs that Trump has threatened are imposed, Peck said there will be a direct impact on Los Angeles residents and American consumers, as the cost of clothing, electronics and appliances from China will increase.
“I think you’re starting to see the impact, but the primary impact so far is on parts or on finished products for retail,” Peck said. “The average impact on LA residents is not that evident yet but that will change the longer the trade war lasts.”
Assistant professor of clinical data sciences and operations Nick Vyas said the trade war will impact consumers in both cities will feel the greatest effect.
“All your daily consumer goods, things sold in Walmart, Target would be affected,” Vyas said.
However, all the agricultural products grown in the U.S. or California are more expensive for China in return. While goods ranging from farm produce to fuel are affected, Chinese nationals living abroad are impacted as well.
“I’m worried about the trade war because it directly affects how much I pay for the tuition here,” Ma said, attributing the root of his concern to how the trade war depreciates the value Chinese currency. According to the International Monetary Fund, while the Chinese yuan "was broadly stable" over the past year, the yuan could depreciate further if the trade war escalates.
The trade war and its effects on both nations are obvious and far-reaching. Vyas said that the economic impact of escalating tensions between the U.S. and China is inevitable.
“The question is at what point will this slow down the economy,” Vyas said. “We just don’t know yet.”
Yet even as the trade war continues to affect citizens of both Guangzhou and Los Angeles, the bond between the two sister cities seems to remain as strong as ever.
“I think the relationship itself will not suffer too much harm,” Peck said.”
Peck said that “business is business” between the two cities and that this is separate from national politics. He notes how political leaders can maintain a strong relationship despite the trade war because the trade war is “really between the national leadership of both countries at the federal level, it’s not at the state and local level as much.”
Sister city programs between the two cities carry on, so there are still efforts at the state level to maintain a positive relationship.
“In the near term, the trade war will not have that much of a negative impact on the cultural ties between China and the U.S.” Peck said.