Lopsided Trade with China Continues to Cost Americans Millions of Jobs, Study Confirms

By Elizabeth Brotherton-Bunch
Oct 23 2018 |
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But you might be surprised by the industry hardest hit.

America’s trade deficit with China has cost 3.4 million U.S. jobs since 2001 and is a major contributor to widening economic inequality, according to a study released Tuesday by the Economic Policy Institute.

Not surprisingly, the manufacturing sector has suffered the most because of America’s lopsided trade relationship with China, losing 2.5 million jobs between 2001 and 2017. But every state and every congressional district has seen job loss as a direct result of the growing China trade deficit, and the study shows that the wider economy continues to be dragged down by the growing deficit.

“Some regions are devastated by layoffs and factory closings, while others are surviving but not growing the way they could be if new factories were opening and existing plants were hiring more workers,” authors Robert E. Scott and Zane Mokhiber write. “This slowdown in manufacturing job generation also is contributing to stagnating wages… and widening income inequality.”

That’s putting it mildly. Workers directly impacted by job loss saw their incomes dwindle by $37 billion per year between 2001 and 2011 alone, the study finds. But the wages of all non-college graduates dropped by $180 billion per year, as import competition from China led to job loss and shifted company profits to those at the top of the economic ladder.

While the data might conjure up images of rundown factories in the industrial midwest, it’s a high-tech sector — the computer and electronic parts industry — that suffered the most job loss, shedding 1.2 million jobs from 2001 to 2017. And tech-friendly California saw the most total jobs lost because of the trade deficit: 562,500. Texas followed close behind, losing 314,000 jobs, followed by New York (183,500), Illinois (148,200) and Pennsylvania (136,100).

If you break the job loss data down as a share of total state employment, New Hampshire places first, losing 3.55 percent of its total jobs from 2001 to 2017 because of the deficit. Oregon comes in second, losing 3.36 percent of its jobs, followed by California, which lost 3.34 percent. You can check out the rest of the state data in the chart below:

The EPI report is filled with detailed data on how the China trade deficit is impacting various sectors of the economy, and it’s worth a deeper dive. But as AAM’s own Scott Paul noted, the main takeaway is that our current trade relationship with China — driven in large part by China’s continued trade cheating — has had real-life consequences in all American communities.

“Millions of hard-working Americans have been sidelined by China’s unfair trade practices, and also by our government’s unwillingness to respond,” Paul said.

Several Members of Congress from both parties also weighed in the new report — and a prevailing theme was that far more must be done to balance America’s trade relationship with China.

“Our manufacturing industry lifts families up with good wages, good benefits, and opportunities for career advancement,” said Sen. Sherrod Brown (D-Ohio). “Our workers can compete with anyone — but they need a level playing field. That’s why trade enforcement against countries like China is critical to preventing more layoffs.”

Republican Rep. Robert Aderholt (Ala.) echoed Brown’s sentiments. “China is and has been a bad actor when it comes to trade deficits. Simply put, their markets should be as open to our products as our markets are to theirs,” he said.

You can find additional comments from Members of Congress here, including statements from Sens. Tammy Baldwin (D-Wis.) and Jeff Merkley (D-Ore.) and Reps. Lou Barletta (R-Ala.), Rick Crawford (R-Ark.), Debbie Dingell (D-Mich.), Marcy Kaptur (D-Ohio), Dan Lipinski (D-Ill.), Rick Nolan (D-Minn.) and Pete Visclosky (D-Ind.).

You can read the full report here, and stay tuned on the blog for additional insight from Scott Paul and Robert E. Scott.