When Trade Is Out Of Balance Tariffs And Trade Enforcement Equals Jobs

Dave Johnson

A new report shows just how many jobs have been lost to “China’s currency manipulation, state-owned enterprises, heavy industrial subsidies, intellectual property theft and piracy, indigenous innovation policies, rare earth mineral export restrictions and other trade-distorting practices,” and lets you look at the numbers in each Congressional district.

We have a huge trade imbalance with China, and trade imbalances that aren’t as huge with several other countries. What this means is that we are buying from them and they are not buying from us. And that isn’t really “trade,” is it? The result of this kind of “free trade” has been a terrible bleeding of jobs from our country to countries that don’t pay good wages, so they can’t buy from us if they wanted to. How can any of this be good for the world economy?

Before “free trade” America had been a nice, big, prosperous market that the world wanted to sell things to. This prosperity was the fruit of our democracy. We, the People have a say here and we demanded good wages, benefits, workplace safety protections, environmental protections and all of this built a prosperous middle class. Everyone in the world wanted to sell into this market, and we were able to get concessions before letting their goods in. If countries exploited their workers we put a tariff on their goods to keep that exploitation from brings them a price advantage. It didn’t make sense to make our democracy a competitive advantage on our own store shelves!

But we were talked into “trade” agreements that let companies move factories outside of the borders of our democracy, to places where people do not have a say and so are paid very little and have few protections, and then let them bring the same goods that used to be made here back here to sell at a lower price. This made democracy a competitive disadvantage and now our wages are falling and our protections are under pressure.

The China Job Loss Report

A trade deficit means jobs deficit, and a new report shows just how many jobs we’re talking about.

According to a briefing paper describing the report, “since 2000 2.8 million jobs, largely in manufacturing, have been lost as a result of the growing U.S. trade deficit with China since that country’s entry into the World Trade Organization (WTO) in 2001.”

The Alliance for American Manufacturing held a conference call with reporters yesterday describing the new report. From their summary:

The growing U.S. trade deficit with China has cost jobs in every one of the nation’s congressional districts, the study reported, including the District of Columbia and Puerto Rico. Between 2001 and 2010, the computer and electronic parts industry was hit the hardest, as more than 909,400 jobs were displaced. The rapidly growing number of imports of computer and electronic parts, including semiconductors and audio-video equipment, accounted for more than 44 percent of the $194 billion increase in the U.S. trade deficit with China during that time.

The report, written by EPI’s Director of Trade and Manufacturing Policy Research Robert E. Scott, cites illegal currency manipulation as a major cause of the rapidly growing U.S. trade deficit with China. Unlike other currencies, the Chinese yuan does not fluctuate freely against the dollar, but is artificially pegged in order to boost China’s exports.

China’s currency manipulation, state-owned enterprises, heavy industrial subsidies, intellectual property theft and piracy, indigenous innovation policies, rare earth mineral export restrictions and other trade-distorting practices have caused China’s share of the total U.S. non-oil goods trade deficit to soar from 69.6 percent in 2008 to 78.3 percent in 2010.

“Unless China raises the real value of the yuan by at least 28.5 percent and eliminates other trade distortions,” the report concludes, “the U.S. trade deficit and job losses will continue to grow rapidly.”

Click to see the map: Interactive map of jobs lost throughout the U.S.

The growth of the U.S. trade deficit with China since that country entered the World Trade Organization in 2001 has had a devastating effect on U.S. workers and the domestic economy. Between 2001 and 2010, 2.8 million U.S. jobs were lost or displaced. Using a new model, the study by the Economic Policy Institute reveals a first look at how the growing trade deficits cost jobs in every congressional district, including the District of Columbia and Puerto Rico. You can see data for all 437 districts by clicking on the states in the interactive map here.

Click to read the entire study: GROWING U.S. TRADE DEFICIT WITH CHINA COST 2.8 MILLION JOBS BETWEEN 2001 AND 2010

 

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