Green Worldwide Shipping is the presenting sponsor of Global Atlanta's Trade Channel. Sign up here for monthly global trade updates.
Trade tumult isn’t exactly undermining Georgia’s foundational relationship with the European Union, but volatile U.S. policies are causing some firms to rethink the timing and intensity of their investments here.
That was the somber undertone of a Europe Day luncheon at the Metro Atlanta Chamber that otherwise served as a celebration of deep historic linkages between the state and the 28-nation bloc.
Georgia exports $14.2 billion in goods and services annually to the EU and hosts an overall stock of more than $46.7 billion in European investment. Most of the state’s top-10 investor nations are from the continent, barring a few from Asia.
Pat Wilson, commissioner of Georgia Department of Economic Development, said during a panel discussion that he expects these historic ties only to deepen, especially when the current period of uncertainty fades.
The U.S. has imposed tariffs on European steel and aluminum and is now weighing a 25 percent levy on automotive imports, all based on the idea that declining U.S. industry is a threat to national security. Many Europeans take that as an affront, given the strength of the 75-year military alliance embodied by NATO.
President Donald Trump and European Commission President Jean-Claude Juncker last July agreed to work toward negotiations to remove industrial tariffs, though they still disagree on whether to include agriculture and other sensitive issues.
For the most part, Mr. Wilson said Georgia has “played it straight down the fairway” when it comes to trade advocacy, noting that the state is home to constituents with varied views on the debate between free and fair trade.
Georgia hasn’t been so subtle when it comes to automotive tariffs. The state is home not only to Korean-owned Kia Motors but also a bevy of other foreign suppliers serving plants around the South. Atlanta boasts the U.S. headquarters of Germany’s Porsche and Mercedes-Benz. A tariff on imported vehicles and parts would affect these firms, which account for thousands of Georgia jobs. It would also leave U.S.-made vehicles open to retaliatory measures that could make auto exports less attractive.
All that said, European companies have continued to invest in Georgia at a record clip — just last week another Spanish firm announced a $12 million plant in Augusta. How tariffs affect investment plans depends on the vantage point.
PolyVision, which produces steel panels with a ceramic coating used as marker boards for classrooms and corporate boardrooms, might have invested differently had it known about the impending trade turmoil with Canada, Mexico and China.
Because of retaliatory tariffs slapped on U.S. goods in Canada, the Georgia-based company — a subsidiary of office furniture giant Steelcase — is now serving Canadian demand from Genk, Belgium, instead of its Oklahoma factory. That’s not an ideal situation, but it is a symptom of today’s trade volatility, said Wout Van der Broek, who handles supply chain issues for PolyVision.
“It changes so quickly that sometimes we regret the decisions that we make,” he said.
Some European companies, however, take the long view and see the tariffs as a regrettable but momentary blip, said Scott Chahalis, president of German-owned Blickle USA, based in Newnan.
“To me, whether it be tariff or political situations, all of those things over time go away, and you have to ask yourself strategically, do you want to be in this market? And the answer that we have at Blickle is, absolutely. We cannot not be in this market.”
Mr. Chahalis added that the pivot in sentiment away from China, with forced technology transfers and a historical role in accelerating the decline of U.S. industry, is helping the European firms that are willing to invest here from countries that, like Germany, haven’t been so quick to give up their manufacturing capacity.
“We’re in a capitalist world. You’re going to have recessions. You can’t lay off and change your whole model because when the next recession spins out, and and it inevitably will, you’re left with people who can’t make stuff. In the U.S. we’re really battling that right now and that’s a huge advantage for European companies,” Mr. Chahalis said.
President Trump decision (once again) to raise tariffs on $200 billion in Chinese goods from 10 to 25 percent starting at midnight Friday will constitute an effective price reduction for Blickle’s German-made wheels and casters, which compete with Chinese products head to head.
Though Mr. Trump has made little effort to work with Europe on reining in China, the luncheon theme centered on shared values and culture across the pond.
Mr. Wilson thanked the consuls and honorary consuls gathered for keeping the state front of mind in their home countries.
“It is truly our most important relationship,” Mr. Wilson said.
Manori de Silva, an attorney who advises European companies on market entry and serves as vice president of the Netherlands-American Chamber of Commerce Southeast, said the state should continue doing all it can to woo investors.
Some European firms have faced challenges bringing in key staff due to the Trump administration’s immigration policies, and foreign student applications have fallen by 6.6 percent.
“There can come a point where this rhetoric becomes the reality, so we have to watch what messaging that we’re putting out there,” she said.
That also applies to social issues like a bill prohibiting abortions after a fetal heartbeat is detected, which was just signed by Georgia Gov. Brian Kemp, as well as previous debates on “religious freedom” legislation seen as hostile to LGBT rights, Ms. de Silva said.
The luncheon, which was packed mainly with European diplomats, bi-national chamber members, executives and more, was seen by panelists and organizers as the potential start of a yearly celebration centering on the importance of transatlantic trade.
Consul General Shane Stephens, who presided over the event as the rotating representative of the EU consular corps in Atlanta, said the EU is a “unique and unprecedented and in my view glorious” achievement in human governance that has sustained peace on the continent.
He made the only mention of Brexit, the United Kingdom’s effort to leave the EU, noting that the process has showed the bloc’s commitment to democracy.
While the transatlantic waters may be “choppier than usual,” he’s optimistic that the strength of a relationship that supports 7 million U.S. jobs and accounts for about half of global GDP will prevail.
“The scale of our economic bond is truly amazing when you stop to reflect on it,” Mr. Stephens said.
The panel discussion was moderated by Metro Atlanta Chamber President Hala Moddelmog.
The Pendleton Group is the presenting sponsor of Global Atlanta's Economic Development Channel. Subscribe here for monthly Economic Development newsletters.
The Dean Rusk International Law Center at the University of Georgia is the presenting sponsor of Global Atlanta's Diplomacy Channel. Subscribe here for monthly Diplomacy newsletters.