In many soundbites from Donald Trump, you hear him say things like, "China is beating us in trade." The article I read investigated that claim. A paper published by economists David Autor, David Dorn, and Gordon Hanson seems to agree with that statement. Trade with China has seemed to increase unemployment and lower wages for American workers. While this sentiment has been played up by many politicians in the past, many economists believed that the negative effects of increased Chinese trade would dissipate quickly and workers would find better jobs elsewhere but it turns out that the labor market adjustment is “gummier than anybody realized.” This problem would not be so impactful in the US economy if China imported as much as they increased exports but, China has run consistent trade surpluses. The article recognizes that Trump is well off base in his policy in trying to fix the issue but there is definitely an impact on the American labor markets from Chinese imports.
The question is now, how do we fixes these issues? There are policies we can enact to help the American market internationally and intranationally. Ben Bernanke asserts that the key to solving this problem is in international diplomacy. Some of China's policies such as the one-child policy have incentivised its citizens to save more than they would normally because they won't have many children to support them later in life which drives down demand for imports. Another economist says that our foreign relations should center around stopping Chinese currency manipulation and their unnecessary trade surplus. We can also create programs in the US to help ease the negative effects on our workers. Mr. Hanson recommends that we make changes "to labor, housing and safety-net policy that would make it easier and less painful for workers to move to new regions and switch to new industries."
To conclude, I will restate that the article finds Mr. Trumps rhetoric of "Us against China," harmful and inflammatory but does point out that some chinese policy has effect on domestic workers. While Mr. Trump and his fellow candidates may want to end this issue, it will only happen with careful diplomacy and strategic domestic labor policies.
Link to Article
It is interesting to me that the only concretely stated solution is the one child policy. Perhaps it may be the bias of having lived in a country providing the freedom to bear children, though it is quite the strange concept from a humanistic standpoint. Though it did seem that the proposed solution of changing labor, housing and safety net policy could perhaps be more effective than the one child policy as it is more immediately directed towards reducing the import rate in the near future. Finally, I do agree that the “Us against China” mentality is a bit vicious and certainly harmful towards our relations with China and that those words are no way for Trump to strengthen these international relations.
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