Continuing to browse our website indicates your consent to our use of cookies. For more information, see our Privacy policy.

US-China trade

Is trade really toxic? How imports support American jobs


Published 30 April 2024

For over a decade, there has been a widespread myth in US politics that global trade causes American job losses. Yet, two decades of data analyzed by a team of Georgetown experts show that the US economy has largely recovered from the initial impact of the China Shock, grown its resilience to foreign competition, and now in fact thrives on foreign imports. In a report commissioned by the Hinrich Foundation, the Georgetown paper reveals the complexity of globalization's impact on workers, the need to address the US' investment in its human capital, and the myth that trade is toxic to the American economy.

Over the past decade, the prevailing belief in US politics has been that international trade takes away American jobs. However, research from Georgetown University’s Lab for Globalization and Shared Prosperity challenges this narrative, revealing that the US economy was already resilient against imports from China and other low-wage countries prior to the sharp shift in US trade policy and public sentiment, stoked by a bipartisan ongoing political narrative, against globalization.

The Georgetown Lab's analysis parse US industry and employment data to show that the impact of the so-called "China Shock" on US manufacturing jobs post-2011 is insignificant, implying that policymakers advocating for nationalist policies are basing their trade policy decisions on outdated evidence.

Many US regions hit hard by the economic shifts caused by globalization, along with many manufacturing industries, have rebounded, showcasing the adaptability and resilience of the US economy to global economic shocks. Imports from emerging economies, excluding China, have actually bolstered US manufacturing employment over the past two decades, demonstrating the benefits of engaging with the interconnected global economy.

The research suggests that, rather than solely focusing on reviving lost manufacturing jobs, US policymakers should pivot toward leveraging the country's comparative advantages in tradable services. This shift in focus holds promise for further enhancing the US economy's robustness and competitiveness in the global marketplace.

These findings, commissioned by the Hinrich Foundation, highlight the complexity of globalization's impact on US workers, the need to address the US' investment in its human capital, and the myth that trade is toxic to the American economy. The Georgetown team find that the US has largely recovered from the initial impact of the China Shock, grown its resilience to foreign competition, and now in fact thrives on foreign imports.

The report finesses the complexity of globalization's impact on workers. It emphasizes the importance of addressing disparities in distribution of the spoils of globalization and enabling workers to gain from emerging economic opportunities, particularly in tradable services.

Perhaps most importantly, the Georgetown Lab's analysis underlines how reactionary protectionism can worsen economic inequalities and undermine US competitiveness by failing - often deliberately, in the ongoing political narrative - to recognize the benefits that global trade actually brings to the American economy.

© The Hinrich Foundation. See our website Terms and conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).


BACK TO TOP