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Report blames China trade for 2.4 mln lost US jobs
WASHINGTON, March 23 |
WASHINGTON, March 23 (Reuters) - Unfair Chinese trade and currency practices caused the loss of as many as 2.4 million U.S. jobs between 2001 and 2008, according to a study released on Tuesday.
The report by the left-leaning Economic Policy Institute said China's "currency manipulation" was a major cause of the United States' trade deficit with China, though it said other Chinese practices contributed to the deficit.
The report comes ahead of an April 15 semi-annual report by the Treasury Department in which it must decide again whether to label China a currency manipulator. U.S. lawmakers in recent weeks have been pressuring the Obama administration to label China as a currency manipulator, something that U.S. President Barack Obama, like his predecessor, George W. Bush, has so far resisted.
The institute's report cited intervention by China in maintaining its yuan currency as the key problem.
"This intervention makes the yuan artificially cheap and provides an effective subsidy on Chinese exports," Robert E. Scott, an EPI economist and author of the report, said in a statement.
"Unless China raises the real value of the yuan by at least 40 percent and eliminates other trade distortions, the U.S. trade deficit and job losses will continue to grow rapidly," Scott said.
The U.S. trade deficit with China grew from $83 billion in 2001 to a record $268 billion in 2008 before falling to $226 million in 2009 alongside a collapse in world trade.
The report said that other Chinese practices, including "massive" industrial subsidies, lax enforcement of labor and environmental laws, intellectual property theft and piracy and market access barriers, have also contributed to the deficit.
The report estimated that 2.4 million U.S. jobs have been lost or displaced in the United States as a result of the burgeoning trade deficit since China joined the World Trade Organization in late 2001.
"Growing trade deficits cost jobs in every state and congressional district ... including the District of Columbia and Puerto Rico," the report said.
"The computer, electronic equipment and parts industries experienced the largest growth in trade deficits with China, resulting in 628,000 job losses -- 26 percent of all jobs displaced by trade between 2001 and 2008," the report said.
Last week, 130 members of the U.S. House of Representatives urged Obama to formally label China a currency manipulator in the April 15 Treasury Department report on foreign exchange practices of major U.S. trade partners.
A bipartisan group of senators also introduced legislation last week threatening China with U.S. duties on its exports to prod Beijing on the currency front.
The lawmakers believe China deliberately undervalues it currency by up to 40 percent, giving Chinese competitors an unfair price advantage that has led to U.S. job losses.
China has denied it is manipulating its currency and warned it will retaliate if its goods are hit with duties in the spat. (Reporting by Doug Palmer; Editing by Leslie Adler)
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