Analysis | Ohio's Globalized Economy Belies Its America First Politics - The Washington Post
In the race to succeed retiring Ohio Republican Sen. Rob Portman, you hear a lot of China bashing and the ills of globalization in this prototypical Midwestern state. What you don’t hear in this persistently xenophobic yet critical race for a spot in the US Senate is just how much Ohio has benefitted from globalization.
The seventh-largest state’s $736 billion gross domestic product owes more of its prosperity to the growing interdependence of the world’s economies than any other after California, Texas and Florida. That’s based on the 771 active foreign factories located in Ohio, according to data compiled by Bloomberg. Among the 10 biggest US states, Ohio has the most foreign-owned factories per thousand square miles.
None of these inconvenient truths are uttered by the two men competing to succeed Portman, who as President George W. Bush’s US Trade Representative negotiated and signed agreements with China and Mexico among about 30 countries. They also never mention that the business they decry with China and Mexico is embraced by almost every Ohio company from Cincinnati-based personal care manufacturer Procter & Gamble Co. to family-owned Panacea Products Corp. in Columbus.
Tim Ryan, a Democratic congressman since 2003, repeatedly reminds voters that “one of my first bills I had was to penalize China for manipulating their currency. I work to get tariffs on China’s steel coming in,” he said during an October debate with JD Vance, the Republican venture capitalist and author of “Hillbilly Elegy” endorsed by Donald Trump. “Why has China taken a huge amount of America’s jobs?” Vance asked. “One of the reasons is because energy is too expensive. You cannot do modern industrial manufacturing without high quality energy.”
But where would Ohio’s economy be without China, its critical trade partner, and the other foreign demand for its goods? Ohio imported $10.2 billion of goods from China in 2020, the largest supplier after Canada, and exported $3.6 billion to China, its third-largest customer after Canada and Mexico. China happens to be a major supplier to Walmart Inc., Ohio’s No. 1 employer with more than 55,000 associates earning an average hourly wage of $17.39. This next chart of Ohio’s international trade comes from the globalEDGE site created by Michigan State University:
Proctor & Gamble, Ohio’s No. 1 company with a market value of $320 billion, increased overseas sales by 12% the past three years to 54.5% of total revenue. During the past decade, Greater China contributed between 8% and 10% of worldwide sales, according to data compiled by Bloomberg. The Sherwin-Williams Co., the Cleveland-based maker of paints and Ohio’s third-largest company, sells $4.2 billion of products overseas annually, a 5% increase from three years ago, with exports 20% of total sales. Even with 80% of its sales in the US, Sherwin-Williams counts 41% of its suppliers among overseas firms. Akron-based Goodyear Tire & Rubber Co. sold almost 50% of its products overseas during the past 10 years. Abercrombie & Fitch Co., the New Albany-based apparel retailer, reports that 60% of its new store openings are outside the US, up from 41% three years ago, according to Bloomberg data.
Ryan, Vance and their respective political parties are similarly silent about the tens of thousands of high-paying jobs created throughout the state by Japan’s Honda Motor Co., Germany’s Siemens AG, Belgium’s Anheuser-Busch InBev SA/NV, France’s Air Liquide SA and India’s Tata Steel Ltd. The Carnegie Endowment for International Peace organized a task force of former policymakers from Democratic and Republican administrations which concluded in a 2018 study, “Is U.S. Foreign Policy Working for Ohio’s Middle Class?”, that political antipathy toward global trade will continue amid a paucity of Ohioans who remain “worried that unstable trade policy would undermine Ohio’s efforts to attract foreign investment and [they] made it clear that they welcomed investment from China.”
What Ohio citizens say and do when it comes to globalization is contradictory “based on the studies that my colleagues and I have done,” said Bill Shkurti, who retired in 2010 as The Ohio State University’s vice president for business and finance and is the former director of Ohio’s Office of Budget and Management. “If Honda wasn’t here, we’d be missing 15,000 auto jobs,” he said in a Zoom interview last month. “Ohio has lost about half of its manufacturing jobs since they peaked in the early ‘60s. The single largest culprit is automation. We now have half as many people in manufacturing as we did 50 years ago. But the value of what they’re producing is twice as much as it was 50 years ago. If Ohio didn’t automate and stay competitive, we probably would have lost even more jobs.”
“There’s certainly xenophobia among Ohioans” that “belies the reality” that “most Ohioans would be appalled to hear how globalized we are,” said Paul Beck, professor emeritus at Ohio State, where he was Distinguished Professor of Social and Behavioral Science and the former chair of its political science department. “Procter & Gamble probably has the highest percentage of its employees’ sons and daughters who speak a foreign language. But I don’t hear Procter & Gamble saying that so much.”
Ryan, who “comes from the Rust Belt and who over the course of his career decried the loss of jobs to Canada, Mexico and China,” doesn’t acknowledge the “reality of the globalization of Ohio employment” and profits, said Beck in a Zoom interview. “I grew up in a small town in Indiana and my mother was the daughter of somebody who ran a hardware store there,” he said. “And when Walmart came into town, it destroyed the market for the hardware store,” Beck said. “She would not ever go into a Walmart.” But when she needed something and “Walmart was the only place to get it, she’d say ‘I’ll ride with you to the store but I will not go inside because Walmart is the enemy.’ So, I went inside. I had no problem.”
Neither did Portman, the congressman, trade representative and senator the past 30 years. Automation may have displaced the traditional factory worker, but globalization kept Ohio working.More from Bloomberg Opinion:
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--With assistance from Shin Pei.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Matthew A. Winkler, editor in chief emeritus of Bloomberg News, writes about markets.
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