REPORT: Growing Trade Deficit with China Cost 3.4 Million U.S. Jobs

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Manufacturing lost 2.6 million jobs due to lopsided deficit

The United States lost 3.4 million jobs, an overwhelming majority of them in manufacturing, from 2001 to 2015 due to America’s surging trade deficit with China, according to a new Economic Policy Institute (EPI) report.

The report, Growth in U.S.-China trade deficit between 2001 and 2015 cost 3.4 million jobs, shows that the trade deficit with China has more than quadrupled since the country’s entrance into the World Trade Organization, rising from $102.3 billion in 2001 to $483.2 billion in 2015. This rise led to job loss in every state and every congressional district, including Washington D.C.

“We can’t continue to ignore the problems China is causing,” said Leo W. Gerard, international president of the United Steelworkers (USW). “Too many of our members have paid the price for China’s unfair and illegal trade policies, and the trade deficit further demonstrates an immediate need for change.”

The manufacturing sector was hit especially hard with 2.6 million manufacturing jobs disappearing, meaning that nearly three-fourths of all lost jobs came from America’s factories.

“Manufacturing policy is now at the forefront of the national discussion, but it must be more than lip service. We need stronger trade enforcement and new tools to addresses currency manipulation and overcapacity,” said Scott Paul, president of the Alliance for American Manufacturing.

In addition to Chinese subsidies that promote overcapacity in steel and other sectors, the report attributes the growing deficit to currency manipulation, Beijing's protectionist policies, and technology pirating.

“This report leaves no doubt that China’s trade practices will continue to impede a true jobs recovery unless our policies change,” Paul said. “And the keys are new trade terms and stronger enforcement.”

The EPI report also found that:

  • Many of the hardest-hit congressional districts were in states dense with high-tech manufacturing such as California, Texas, Oregon, Massachusetts, Minnesota, and Arizona.
  • Between 2001 and 2011, growing trade deficits reduced the incomes of directly impacted workers by $37 billion per year, and growing competition with imports from China and other low-wage countries reduced the wages of all non–college graduates by $180 billion per year.
  • The trade deficit in the computer and electronic parts industry grew the most, and 1,238,300 jobs were lost or displaced between 2001 and 2015.

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