May 11, 2020
New Research: The Impact of U.S. Imports on Manufacturing Employment
Many politicians on both the left and the right want to curb imports in order to strengthen the domestic manufacturing sector. This debate over the relationship between imports and manufacturing jobs is not new, notes AAF’s Director of Immigration and Trade Policy Jacqueline Varas: In the decade following China’s ascension to the World Trade Organization (WTO) in 2001, an event referred to as “the China Shock,” the number of American manufacturing jobs declined substantially, leading many to question the benefits of trade liberalization.
But what is the relationship between imports and manufacturing employment now, after the world has adjusted to the China Shock? In new research, Varas estimates the impact of imports on manufacturing jobs in the United States from 2010-2016. She finds that imports contributed to growth in domestic manufacturing jobs.
Specifically, she finds:
- A 1 percent increase in imports leads to a 0.07 percent increase in jobs;
- Based on these results, over one quarter of total manufacturing jobs created between 2010 and 2016 – roughly 220,000 jobs – can be directly attributed to increases in imports; and
- The results show that international trade, and specifically imports, are job creators, which reflects global supply-chain integration in the modern economy.