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U.S. Trade Deficit With China Cost America 2.8 Million Jobs Over the Past 10 Years

A whopping 2.8 million American jobs-1.9 million of them in manufacturing-- have been lost in the past decade as a result of the increasing U.S. trade deficit with China, according to a new study released by the Economic Policy Institute (EPI). View interactive map of jobs lost in U.S. here.

The 10 states suffering the largest net losses between 2001 and 2010 were:

  • California (454,600 jobs),

  • Texas (232,800),

  • New York (161,400),

  • Illinois (118,200),

  • Florida (114,400),

  • North Carolina (107,800),

  • Pennsylvania (106,900),

  • Ohio (103,500),

  • Massachusetts (88,600) and

  • Georgia (87,700).

Industrial sectors hit hardest in the past 10 years due to the trade deficit include:

  • apparel and accessories (178,700 jobs),

  • textile fabrics and products (92,300),

  • fabricated metal products (123,900),

  • plastic and rubber products (62,000),

  • motor vehicles and parts (49,300), and

  • miscellaneous manufactured goods (119,700).

China's share of the total U.S. non-oil goods trade deficit soared from 69.6 percent in 2008 to 78.3 percent in 2010, stated the report, due to China's "currency manipulation, state-owned enterprises, heavy industrial subsidies, intellectual property theft and piracy, indigenous innovation policies, rare earth mineral export restrictions and other trade-distorting practices."

Scott Paul, executive director of the Alliance for American Manufacturing (AAM) , said the report offers "conclusive evidence that immediate action by the Administration is needed to curb China's currency manipulation which, along with China's blatant trade violations, are having the same devastating impact on high-tech production that they've already had on the nation's longstanding industrial base." AAM is a partnership of America's leading manufacturers and the United Steelworkers union.

Written by Robert Scott, EPI's Director of Trade and Manufacturing Policy Research, the study cited illegal currency manipulation as a major reason behind the trade deficit. (Unlike other currencies, the Chinese yuan does not fluctuate freely against the dollar, but is artificially pegged in order to boost China's exports.) "Unless China raises the real value of the yuan by at least 28.5 percent and eliminates other trade distortions," the report concluded, "the U.S. trade deficit and job losses will continue to grow rapidly."

"Global trade in advanced technology products-often discussed as a source of comparative advantage for the United States-is instead dominated by China," the study concluded.

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