China trade 'cost 3.4m US jobs in 2001-2015'

WASHINGTON • A yawning trade deficit with China cost 3.4 million US jobs between 2001 and 2015, according to a report published on Tuesday which coincided with abrupt White House efforts to retool trade policy.

Mounting American reliance on Chinese imports and unfair Chinese trade practices have also helped hollow out the US manufacturing sector, which accounted for nearly three-quarters of all the jobs lost due to the trade gap, said the report by the Economic Policy Institute (EPI).

The non-partisan think-tank's report jibed with President Donald Trump's blunt moves to upend prevailing policies on trade, which he has blamed for the export of American industrial jobs, chiefly to China and Mexico.

United Steelworkers union president Leo Gerard, in helping to launch the report, told reporters that Mr Trump had been victorious among traditionally pro-Democrat voters in industrialised areas of the United States.

Between 2001 and 2015, the US trade deficit with China more than quadrupled to US$483.2 billion (S$682 billion), according to the report.

While Labour Department data shows the US manufacturing sector is smaller than when former president Barack Obama took office in January 2009 in the midst of the financial crisis, it has added 800,000 jobs since February 2010.

Computers and electronic parts were among US manufacturing industries that suffered the most from displacement, according to the EPI report, losing 1.2 million jobs during the period.

"The vast bulk of the manufacturing jobs lost were in so-called durable goods industries, high-tech and very capital-intensive industries that provide very good jobs with excellent benefits in industries like steel and machine tools and electronic appliances," said the report's author, Dr Robert Scott.

However, Dr Marcus Noland, director of studies at the Peterson Institute for International Economics, rejected what he said was the report's "basically fallacious" direct correlation between a trade deficit and job losses. Trade "fundamentally does not destroy or create jobs", said Dr Noland. "It affects the composition of employment, it affects the occupational distribution."


A version of this article appeared in the print edition of The Straits Times on February 02, 2017, with the headline 'China trade 'cost 3.4m US jobs in 2001-2015''. Subscribe