Study: Trade Deficit with China Cost U.S. 2.4 Million Jobs

A study by the Economic Policy Institute concludes as many as 2.4 million U.S. jobs were lost between 2001 and 2008 because of China’s unfair trade and currency practices.

According to Reuters, the liberal-leaning institute identified “currency manipulation” on the part of China as the biggest reason for the U.S. trade deficit with China. The report concludes the Chinese government’s intervention in maintaining its yuan currency “makes the yuan artificially cheap and provides an effective subsidy on Chinese exports.

“Unless China raises the real value of the yuan by at least 40 percent and eliminates other trade distortions, the U.S. trade deficit and job losses will continue to grow rapidly,” said Robert E. Scott, an EPI economist and author of the report.

Reuters reports the U.S. trade deficit with China increased from $83 billion in 2001 to an all-time high of $268 billion in 2008 before falling off to $226 million last year during the collapse of world trade.

Other factors cited in the report for the trade deficit with China include “massive” industrial subsidies, lack of enforcement with regards to labor and environmental laws, intellectual property theft and piracy and market access barriers.

The report goes on to state that the trade deficits have “cost jobs in every state and congressional district…including the District of Columbia and Puerto Rico.

“The computer, electronic equipment and parts industries experienced the largest growth in trade deficits with China, resulting in 628,000 job losses — 26 percent of all jobs displaced by trade between 2001 and 2008,” the report said.