Trade with China cost the US 3.4 million jobs, study says
A report by the Economic Policy Institute points out that job losses followed China's entry into the World Trade Organisation. China used currency manipulation, cheap labour, union suppression. According to the think tank, which is affiliated with the labour movement and close to low- and medium-income families, the two countries need to rebalance “trade and capital flows” to avoid mutual destruction.
Washington (AsiaNews) – The trade deficit with China has cost the United States 3.4 million jobs, this according to a report by the Economic Policy Institute (EPI)
The EPI, which is based in Washington, DC, is affiliated with the labour movement and includes the needs of low- and middle-income workers in its economic policy research.
In the report it published yesterday, the non-profit think tank points out that the loss of jobs in the US has increased since China joined the World Trade Organisation 17 years ago.
About 1.3 million of the job losses have occurred in the last 10 years during which the US trade deficit grew by more than US$ 100 billion.
The job losses have been concentrated in the manufacturing sector, including industries in which the US has traditionally held a competitive advantage like computer, electronic parts, and electrical equipment and appliances.
The study comes right in the middle of the growing trade war between the US and China. The Trump administration has accused Beijing of unfair trade practices (currency manipulation, government support for exports, forced copying transfers), calling for a reduction in the trade imbalance.
Quite even-handed, the report seems to justify Trump's criticism. “China’s trade-distorting practices, aided by China’s currency manipulation and misalignment and its suppression of wages and labour rights, resulted in a flood of dumped and subsidised imports that greatly exceeded the growth of US exports to China,” the report says.
The trade imbalance’s negative impact on wages was also singled out. The report said this resulted “in a net loss to workers as they move from higher-paying jobs in import-competing industries to lower-paying jobs in exporting industries”.
For the EPI, the goal is not to continue the trade war; instead the "US US-China trade relationship needs to undergo a fundamental change”.
The two nations are “locked in destructive, interdependent economic cycles, and both can gain from rebalancing trade and capital flows,” the study notes.