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US lost 3.4 million jobs after China’s entrance into WTO: Study

This AFP photo taken on October 17, 2018, shows workers sewing shoes at a factory in Qingdao in China.

The massive growth in the US trade deficit with China that came after Beijing joined the World Trade Organization (WTO) in 2001 has cost an estimated 3.4 million American jobs, according to a new report.

The growth in the trade deficit from 2001 to 2017 hit the US manufacturing sector in particular, where 74 percent of those jobs were lost, according to a study published Tuesday by the Economic Policy Institute, an American think tank based in Washington, DC.

“Workers who are displaced from manufacturing jobs tend to drop out of the labor force,” said Robert Scott, a co-author of the report and the director of trade and manufacturing policy research at EPI.

"This report underscores the ongoing trade and jobs crisis" in the US, Scott added..

The 3.4 million figure was calculated by estimating the amount of labor needed to produce a given volume of exports and the labor displaced when imports are substituted.

America incurred a goods deficit of $376 billion with China last year, the largest imbalance with any nation.

The report finds that there were job losses in every single state and county. The San Francisco Bay Area, located in the northern part of California state, was the hardest hit, with nearly 60,000 jobs displaced.

The trade deficit in the computer and electronics industry grew the most, resulting in 1.2 million job losses.

“China’s economy is slowing and the only thing keeping them alive is exports,“ Scott said. “If we eliminate the trade deficit which I think we can do, we would end up hiring more in high tech industries.”

Since taking office, US President Donald Trump has claimed that China’s rise as an exporting powerhouse has hurt US workers and manufacturing.

Trump has imposed tariffs on $250 billion in Chinese goods and has threatened to target all Chinese exports to the US. Beijing has responded by imposing tariffs on $110 billion in US products.

The Trump administration contends that China is using predatory industrial practices to challenge American technological dominance.


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