China Trade Deficit Causes 50,000 Lost Jobs In Arizona
Since 2001, the trade deficit with China has made a major impact on the United States. 2.8 million jobs have been lost, mainly in the manufacturing industry. However, now the deficit is hitting closer to home.
Arizona itself has experienced a job loss of 50,000 jobs, according to a study released by the Economic Policy Institute.
The growing trade deficit began when China entered the World Trade Organization. However, one of the most major causes of the ever-growing deficit with China is its illegal currency manipulation, according to Robert E. Scott, the EPI’s Director of Trade and Manufacturing Policy Research.
China’s currency, the yuan, does not fluctuate freely against the dollar. Instead, it is programmed in order to help increase China’s exports.
The most major losses that occurred nationwide were in the computer and electronic parts industries, as 909,000 jobs were lost. The imports of the industries accounted for more than 44 percent of the $194 billion increase in the trade deficit between 2001 and 2010.
“Arizona urgently needs more manufacturing jobs to put people back to work, but our out-of-control trade deficit with China makes that impossible,” says Scott Paul, executive director of the Alliance for American Manufacturing.
In addition to Arizona, the deficit has also impacted each congressional district, including the District of Columbia and Puerto Rico.
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. In addition to the currency, this is due to state-owned enterprises, industrial subsidies, property theft and piracy, innovation policies, rare earth mineral export restrictions and other trade-distorting practices.
In response to the deficit, Paul states, “Reducing our trade deficit and stopping China’s unfair trade practices will grow jobs, lower our trade deficit and put the United States on sound fiscal footing.”
By “challenging China’s currency manipulation,” there will be an increase in federal revenue, Paul said. Paul also said that China must raise the value of the yuan by at least 28.5 percent, otherwise job losses are going to continue to increase.