New Report: 3.4 Million American Jobs Wiped Out by U.S.-China Trade

Tags Trade

Trade Deficit Growth Continues to Prevent Recovery, Feeds Widening Economic Inequality

Washington, D.C. – The ballooning trade deficit with China cost 3.4 million American jobs between 2001 and 2017, according to a new report released today. Massive job losses caused by trade with China since 2001 overwhelmingly have impacted the manufacturing sector, the Economic Policy Institute finds. The growing deficit almost entirely explains why manufacturing employment has not fully recovered along with the rest of the economy since the Great Recession.

"The growing trade deficit with China affects different regions in different ways," write the authors of the report. "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. This slowdown in manufacturing job generation also is contributing to stagnating wages and incomes of typical workers and widening inequality."

Alliance for American Manufacturing President Scott Paul said:

"China's cheating on trade has real consequences. As this report shows, millions of hard-working Americans have been sidelined by China's unfair trade practices, and also by our government's unwillingness to respond. Americans are expecting leaders, especially candidates from both parties in the upcoming midterm elections, to do something to finally address this massive job loss and work to stabilize our factory communities. Without assertive action, our out-of-control trade deficit will continue to rob Americans of job opportunities and make the American Dream a distant fantasy."

U.S. Sen. Sherrod Brown (D-Ohio) said:

"Our manufacturing industry lifts families up with good wages, good benefits, and opportunities for career advancement. 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 and preventing American jobs from being sent overseas. I'll continue to work across the aisle to hold China accountable for its cheating that has shuttered factories across Ohio and around the country, so we can finally have a trade policy that puts American manufacturers and American workers first."

U.S. Rep. Robert Aderholt (R-Ala.-04) said:

"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. It is past time that the United States stand strong against China's unfair trade practices."

The trade deficit-related job losses are affecting communities across the country and are felt in industries in which the United States long has demonstrated a competitive advantage. By eliminating the trade deficit with China, the United States could create millions of good-paying jobs in manufacturing and manufacturing-related fields.

The computer and electronic parts industry experienced the most dramatic growth in terms of the trade deficit, leading to the displacement or loss of more than 1.2 million jobs. The hardest-hit congressional districts are in Arizona, California, Illinois, Massachusetts, Minnesota, New York, Oregon and Texas.

The widening trade deficit even has slashed the wages of workers without college degrees in sectors outside of manufacturing. Workers directly impacted by the trade deficit have lost $37 billion per year in wages from 2001 to 2011. The wages of all non-college graduates dropped $180 billion per year because of the growing competition with imports from China and other low-wage countries. Companies have redistributed these lost wages to workers at the top of the income distribution, exasperating our nation's inequality crisis.

The free market is not responsible for China's large and growing trade surpluses with the United States and the world. Instead, China has crafted its growth through dishonest policies that subsidize and dump a vast number of exports, pirate software and technology from foreign companies, manipulate its currency and invest in excessive overproduction through state-owned enterprises.

Americans must pressure Congress and the White House to continue to respond swiftly and efficiently to the growing trade deficit in order to reverse the catastrophic impact it is having on the U.S. economy and U.S. workers. Washington must hold China accountable by enhancing the enforcement of fair trade laws and treaty obligations, in addition to implementing better systems to identify and respond to import surges.

The following are the reactions of Members of Congress to the report's findings:

U.S. Sen. Tammy Baldwin (D-Wis.):

"In 2000, I voted against letting China into the World Trade Organization. Since joining, China has refused to play by the international rules that all WTO members must agree to. As this report clearly shows, when China cheats, Wisconsin workers lose. It's time to hold bad actors like China accountable when they use unfair trade actions that disadvantage American manufacturers and undermine the ability of American businesses to compete on a level playing field."

U.S. Rep. Lou Barletta (R-Pa.-11):

"I have long been concerned with China's unfair and predatory trade practices. These activities hurt the U.S. economy, and we must make certain that nations who engage in trade cheating are held accountable for their actions. As a driving force behind the 2016 ENFORCE Act, which took steps to prevent countries from circumventing trade laws, I am pleased that the Trump Administration is addressing the illicit practices of foreign bad actors like China, and I will continue to support efforts that level the playing field for affected domestic businesses and help protect the American worker."

U.S. Rep. Rick Crawford (R-Ark.-01), Co-Chairman, Congressional Steel Caucus:

"For years, China's illegal trade practices have undermined American businesses and the jobs those businesses support. On a level playing field American companies can compete with anyone else in the world. I continue to support actions that put American interests first."

U.S. Rep. Debbie Dingell (D-Mich.-12):

"Our primary focus must be bringing jobs to the US and having trade policies that put the needs of working people and their communities first. Our workers can compete against anyone, but they need a level playing field. Five thousand jobs lost in Southeast Michigan is unacceptable and has a real human cost in our community. I'm fighting for the Michigan economy, manufacturing and keeping our state at the forefront of innovation."

U.S. Rep. Marcy Kaptur (D-Ohio-09):

"The U.S.-China trade deficit has had a devastating economic impact on our economy and hard-working Americans. Since 2001, 6,600 jobs in my district have been lost to offshoring and to unfair Chinese trade practices. Workers across our region and in China's sweatshops deserve better. Holding job exporters accountable and working with our allies to better target the culprits of global excess are first steps to balancing trade accounts."

U.S. Rep. Dan Lipinski (D-Ill.-03):

"The numbers don't lie. Despite some changes in policy, it is painstakingly clear that China continues to inflict damage on American manufacturers, their hard-working employees, and the middle class with their unfair trade practices. Stopping China and other countries from cheating American workers is a bipartisan issue that those on both sides of the aisle should be able to get behind."

U.S. Sen. Jeff Merkley (D-Ore.):

"If we don't make things in America, we won't have a middle class in America. This important report shows that subpar labor and environmental standards are a form of subsidies that make manufacturing in China artificially cheap. If we want to stand up for American workers, we need to fight for a level playing field for American businesses and workers, and not let China undercut our wages and environmental protections."

U.S. Rep. Rick Nolan (D-Minn.-08):

"Make no mistake, our Nation's skyrocketing trade deficit with China has reached a tipping point – costing the American economy and workers billions in lost wages and millions of good paying jobs – triggering a devastating ripple effect in mining, manufacturing, transportation, building trades, and Main Street businesses across Northern Minnesota. We can no longer allow foreign subsidized poor-quality products to flood our markets and undermine American businesses. The fact is, American workers produce the best products in the world – and when given a level playing field, they win almost every time. But they can't be expected to compete with one hand tied behind their backs because of massive trade deficits and unfair trade practices by trade cheater nations like China. This study serves as a warning sign of what's to come if we fail to address this catastrophic issue. Congress and the White House must act now to stabilize the growing trade deficit with China once and for all, or risk further damage to our communities and our economy."

U.S. Rep. Pete Visclosky (D-Ind.-01), Vice Chairman, Congressional Steel Caucus:

"I applaud the initiative of the Alliance for American Manufacturing and the Economic Policy Institute for documenting in this report the devastating impact of China's illegal trading practices on American workers and our industrial base. The American manufacturing industry is absolutely essential to the strength of our national economy and our national defense. We must continue to do all we can to fight back against the illegal trading practices of China and all other countries that cheat in order to defend the dignity of the American workforce."

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