EPI: China currency control costs U.S. jobs
The growing United States-China trade deficit eliminated or displaced an estimated 2.4 million U.S. jobs from 2001 to 2008, according to a new report from the Economic Policy Institute, a Washington-based think tank.
The report, Unfair China Trade Costs Local Jobs, said the hardest hit areas are those where high-tech industries are concentrated, like the Silicon Valley in California and parts of Texas.
'A surge in imports of Chinese computer and electronic products accounted for more than 40 percent of the $186 billion increase in the U.S. trade deficit with China between 2001 and 2008, with these industries experiencing the largest trade-related job losses of any sector — 627,700 jobs, or 26 percent of all jobs lost or displaced between 2001 and 2008,' EPI said. 'The deficit grew by an average of $26.6 billion each year between 2001 and 2008; Chinese exports to the United States in 2008 were more than five times greater than U.S. exports to China.'
In 2009, China was responsible for more than 80 percent of the United States' total, non-oil trade deficit. The report said China's refusal to revalue its currency is a major reason for the trade imbalance.
'While the value of its currency should have increased as China exported more and more goods, it has instead remained artificially low, a result of China's aggressive efforts to manipulate the currency by acquiring more than $2 trillion in foreign exchange reserves since 2001,' the think tank said. 'This currency manipulation gives China an unfair advantage in global trade.'
'We have allowed the Chinese government to game the system for far too long, with serious consequences for the U.S. economy,' said EPI economist Robert Scott, the report's author. 'The Treasury Department should publicly declare China to be a currency manipulator, and the Congress should authorize tariffs of at least 25 percent if China doesn't start playing by fair rules.'
Scott also pointed to poor labor rights issues in China that he said is, in effect, 'subsidizing exports.”