Trade with China remains a drag on employment

Trump’s ‘Phase 1’ agreement isn’t a good fix

New Hampshire lost an estimated 26,000 jobs — fully 3.66% of the state’s employment — over a 17-year period to the U.S. trade deficit with China. A new report finds the Granite State lost a larger share of its jobs to Chinese imports than any other in the nation, and that these job losses impacted industries ranging from shoes and textiles to advanced technologies.

While this fact may have gone unnoticed to some, it hasn’t for the factory workers displaced, the workers in the state’s economy that depend on them and the many families with multiple low-paying jobs just trying to make ends meet. For these folks, it’s been a staggering shock.

Voters may be rightly perplexed about what to make of all this, as Donald Trump signed a trade deal with China and took a victory lap with Wall Street executives, while the Democratic presidential candidates have largely criticized the president’s “trade war” as being ineffective and costly.

We’ve been monitoring the impact that surging Chinese imports have had on American jobs for most of the past two decades and can shed some light on what’s really going on.

The U.S.-China goods trade balance for 2018, a measure to which Trump pays attention, was a record $419.5 billion deficit. It’s another point in a disturbing trend: From 2001 — the year that China ascended into the World Trade Organization — until 2018, the U.S. trade deficit with that country ballooned by more than 400%. This has been a slow-rolling disaster in America’s manufacturing communities, where import competition has crowded out factory jobs and made it hard to create new ones.

President Trump — by means of his Twitter threats and his tariffs — hasn’t been able to reverse this trend, because these deficits are problems years in the making and have complex structural underpinnings. The Economic Policy Institute analysis notes that in 2017 and 2018 alone, more than 700,000 jobs were displaced nationally as the China trade deficit kept growing.

Trump has changed the footing of U.S.-China trade policy after years of acquiescence by our political leaders, Democratic and Republican alike. He’s shifted the status quo, and it’s unlikely to shift all the way back after he’s gone.

But his “Phase 1” agreement with China isn’t a good fix. Beijing promised to buy specific amounts of commodities and manufactured goods, protect copyrights for American companies and expand market access for American finance. It will, as the president said when he signed it, “make a lot of bankers look very good.”

Helping bankers sell financial services in China is not the trade reform Trump promised voters in 2016. The deal does nothing to tackle the structural issues that affect the livelihoods of American manufacturing workers — like the massive subsidies the Chinese government showers on its companies; the overcapacity in major industries like steel, semiconductors and aluminum; or the virtually nonexistent labor and environmental standards that go unenforced.

Too many entrepreneurs, long-established manufacturers and skilled American workers know the truth: We can compete against anyone on a level playing field, but against the Chinese government when the deck is stacked against us? It’s borderline impossible.

That’s the opportunity that will be presented to President Trump’s eventual Democratic challenger: Not to dismiss the trade fight he started with China as misguided but to secure a deal that truly benefits workers in this country. They will need to succeed where Trump’s solution has fallen short, because if they don’t, this problem will only grow worse.

Even as they continue to pile up, jobs lost to China trade are not a fait accompli — a fact of life in a globalized marketplace. They were the result of trade policy decisions our leaders made decades ago. Different decisions now will produce a better result later. Unfortunately, neither Donald Trump nor his pack of Democratic challengers have unveiled a convincing roadmap on U.S.-China economic relations moving forward. Some Democrats want to remove the existing tariffs on China, others do not.

There are no serious plans for reform, and we desperately need one. It’s essential for ensuring the manufacturing workers of today know we have their backs, and the makers of tomorrow can still live their dreams right here in America.

Scott Paul is president of the Alliance for American Manufacturing.

Categories: Opinion