The United States has lost 2.8 million jobs, including 56,900 in Wisconsin, as a result of the U.S. trade deficit with China since that country gained entry into the World Trade Organization in 2001, according to a recently released study by the Economic Policy Institute, a Washington, D.C.-based think tank.
The report cites illegal currency manipulation as a major cause of the rapidly growing U.S. trade deficit with China.
China’s share of the total U.S. non-oil trade deficit has risen from 69.6 percent in 2008 to 78.3 percent in 2010, according to the Washington, D.C.-based Alliance for American Manufacturing, which is a partnership of U.S. manufacturers and the United Steelworkers union. The alliance also cites China’s “state-owned enterprises, heavy industry subsidies, intellectual property theft and piracy, indigenous innovation policies and rare earth mineral export restrictions and other trade distorting practices” as reasons for the U.S.’s rising trade imbalance with China.
“This report offers conclusive evidence that immediate action by the (Obama) administration is needed to curb China’s currency manipulation, which, along with China’s blatant trade violations, are now having the same devastating impact on high-tech production that they’ve already had on the nation’s longstanding industrial base,” said Scott Paul, executive director of the Alliance for American Manufacturing. “And if President Obama won’t name China a currency manipulator, then Congress will have no choice but to pass legislation that will hold them accountable. We urgently need a national strategy for restoring America’s global leadership in manufacturing. Challenging China’s currency manipulation would be an important first step toward developing such a strategy. It would not only cut unemployment, it would result in a much-needed increase in federal revenue. Unless China raises the real value of the yuan by at least 28.5 percent and eliminates other trade distortions, the U.S. trade deficit and job losses will continue to grow rapidly in the future.