The United States also prefers to invest in Europe over Asia; in 2017, 64 percent of foreign direct investment from the United States went to Europe while only 16 percent went to the Asia-Pacific region. It is important for the United States to maintain strong economic ties to Europe, and it is even more important for the states themselves as Europe is a major source of jobs and investment.
The Transatlantic Economy 2018 report by the Center for Transatlantic Relations paints a clear picture of jobs and economic linkages between the United States and Europe on a national level. The statistics provided for Maryland reveal two trends in the state that are emerging in its economic relationship with Europe: The economic ties are not translating into job growth to the extent other states are seeing job creation from European firms and one of Maryland’s major sources of investment and goods is Britain, a country whose economy is predicted to contract as it negotiates a divorce from the European Union.
Although China is a major trading partner of the United States, Europe remains the No. 1 destination for Maryland goods. An estimated $2.7 billion worth of goods was exported to Europe from Maryland, compared with $484 million of exports to China. A burgeoning middle class in China is demanding more goods, but the numbers do not lie: Europe outpaces China as the premier source for Maryland’s goods five times over. Britain alone imports more goods from Maryland than China does.
Overreliance on Britain could prove calamitous as it negotiates its exit from the European Union and the common market established on the European continent. U.S. investments into Britain fell more than 50 percent in the first three quarters of 2017, signaling a shift from that nation as a traditional trading partner over Brexit uncertainty.
Maryland should seek to diversify sources of European imports and destinations of exports in Europe to ensure continued strong economic performance. Concentrating Maryland’s trade and investment on Ireland instead of Britain would mitigate potential economic risks from Brexit while providing an English-speaking springboard into the European market for Maryland’s businesses.
Approximately 89,400 jobs in Maryland are from Europe — more than the population of the cities
of Frederick or Rockville. European companies make up 76 percent of foreign-affiliate jobs — third overall, with Maryland only narrowly behind Rhode Island and Connecticut for the highest percentage. The Dutch provide about 21 percent of all foreign-affiliated employment, or approximately 24,800 jobs in Maryland. More than 3,400 jobs were generated from Dutch multinationals between 2010 and 2015.
Almost every state has seen an increase in the number of jobs that stem from Europe since 2006. Across all 50 states, the average growth in jobs from Europe as a percentage change between 2006 and 2015 was 24 percent; Maryland saw only a 3.2 percent increase in jobs generated from the transatlantic economy, and Virginia saw an 18 percent increase.
Maryland has not added nearly as many jobs as other states; it is ranked sixth from the bottom in generating jobs from Europe. Either Maryland is not courting European investment enough or this investment is not translating into jobs. Maryland has much room to grow in European trade — but only if a trade war is avoided.