International Trade, Politics and Development (Feb 2022)
Commerce, jobs and politics: the impact of the USA–China trade on USA domestic politics
Abstract
Purpose – The purpose of the paper “Commerce, jobs and politics: the impact of the USA–China trade on USA domestic politics” is to examine the impact of Chinese trade with the USA to determine the consequences of the trade on manufacturing employment. The geographic and sectoral impacts of this trade are assessed. The conclusion is that the USA–China trade has affected political polarization in such a way as to affect electoral outcomes. Implications for policy are discussed in the paper. Design/methodology/approach – The overall design is a focused case study in terms of its focus on the USA–China trade relations. There is also a statistical component due to the breakdown of the USA in economic commuting zones. Findings – The major finding is that Chinese import penetration created substantial political polarization in the USA and that polarization affected electoral outcomes. Chinese import penetration also resulted in a shift of jobs from the eastern heartland to the coasts. Much of the transition was aided by the restructuring of jobs within firms from manufacturing to high-end services. Research limitations/implications – Perhaps, the biggest limitation concerns how general and durable the findings are. The authors establish that the first decade after Chinese entry into the World Trade Organization (WTO) (2001) was characterized by economic disruption in the USA labor market. Whether the economic effects will have a longer duration is not known. Practical implications – One practical limitation is that it is difficult to know what policy actions to take on the basis of the research: trade policy, human capital (education) policy or place-based policies which aid particular regions. Social implications – The social implications in this paper are jobs and employment policy. Originality/value – The author thinks this is very original work, though based on the work of several economists. But outside of a few articles, the author does not think much has appeared in political science journals.
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