America Is Fighting the Wrong Trade War
The China Shock Is Over—and More Tariffs Will Not Help Workers
By Niccolò W. Bonifai, Nita Rudra, Rodney Ludema, and J. Bradford Jensen. Foreign Affairs. September 12, 2024
Kamala Harris and Donald Trump have profoundly different visions for the future of the United States. They wildly diverge when it comes to social issues, such as abortion. They do not agree on whether to raise or cut taxes. And they could take U.S. foreign policy in opposing directions, especially when it comes to the country’s alliance with Europe.
Yet there is one issue on which the Democratic and Republican nominees are in sync: protectionism. Trump has proposed sweeping tariffs of 10–20 percent on the vast majority of goods. Harris has been more critical of across-the-board tariffs, but according to a campaign spokesperson, she would nonetheless “employ targeted and strategic tariffs to support American workers, strengthen our economy, and hold our adversaries accountable.”
This concurrence is not surprising. Over the past decade, protectionism has gained bipartisan support. During his four years in office, Trump slapped tariffs on imports from both allies and adversaries. President Joe Biden promised to usher in a different trade era, pledging a return to multilateralism. Yet the Biden administration maintained almost all of Trump’s tariffs, added new ones, and expanded “Buy American” provisions that mandate federal agencies purchase domestic products.
According to Biden, Harris, and Trump, such restrictions protect American industries from foreign competition. They argue that tariffs can promote national security, foster economic growth, and restore blue-collar jobs, which, they claim, have disappeared because of import competition. “I’m going to renegotiate our disastrous trade deals,” Trump said during his 2016 campaign. “We will only make great trade deals that put the American worker first. And we are going to put our miners and our steelworkers back to work.”
It is true that import competition, specifically from China, cost the United States manufacturing jobs. But politicians are wrong to suggest that protectionism will help generate employment. A new study we conducted using recent trade and employment data shows that Chinese import competition is no longer a factor driving U.S. manufacturing employment. The United States stopped shedding manufacturing jobs after the first decade of the twenty-first century—long before Washington began slapping levies on Chinese products. The share of American jobs in manufacturing remained steady even as Chinese imports to the United States continued to grow between 2011 and 2018. It has remained constant since, even as Trump applied tariffs and Chinese exports to America fell.
The United States, in other words, is fighting the last trade war. Its current policies are designed for a period that has long since passed, and they are not expanding the labor market. In fact, they may be suppressing employment. According to our research, trade with developing economies helps U.S. manufacturers hire more workers, largely by making it easier for these companies to import components.
Washington should, therefore, adopt a different strategy. Rather than pursuing protectionist policies, it should focus on reducing barriers and strengthening global economic ties. More important, it should prioritize finding ways to ensure that all Americans can benefit from globalization. Doing so is the best way to help workers in the United States—and across the world.
Missing The Boat
Beginning in the 1990s, the U.S. manufacturing sector experienced substantial competition from China. The country’s spectacular investment in export-led economic growth and comparatively low wages made it much harder for low-skill U.S. manufacturing industries to compete in global and domestic markets. As a result, many companies shuttered factories and laid off workers.
These job losses were significant. According