A 25 percent tariff on all imported goods from China would create more than 720,000 American jobs by 2024, a new study finds.
The United States would undergo a nationwide reshoring-jobs effort if it imposed a tariff on all Chinese imports, the latest study from Coalition for a Prosperous America (CPA) researchers Jeff Ferry and Steven Byers finds.
Ferry and Byers’ study reveals that an across-the-board 25 percent tariff on every good imported to the U.S. from China would “deliver a significant, sustained boost to the US economy” by creating 721,000 American jobs and adding $125 billion to the nation’s GDP by 2024.
“Our model demonstrates that across-the-board US tariffs on Chinese imports stimulate the US economy, increase US production and jobs, and lead to a reduction in US import costs over time,” Ferry said.
“This result is consistent with US experience in 2018 and early 2019 when tariffs on steel, aluminum, and other industries led to job creation in those sectors,” Ferry said. “The modeling results provide additional evidence that decoupling the US economy from China and its predatory trade and subsidy practices will make the US economy stronger, with more production, investment, and jobs.”
If a 25 percent tariff were imposed on all Chinese imports, researchers found that about $3.23 billion of production would leave China in 2020, and by 2024 nearly $300 billion in production will have left China.
Most prominently, the massive job-reshoring effort that would result from a 25 percent tariff on all Chinese imports would bring more American jobs back to the U.S. economy by 2024 than the state of California has lost to free trade with China over the past two decades.
Particularly, nearly 193,000 of those 721,000 U.S. jobs created from a 25 percent tariff on Chinese imports would be in the manufacturing sector. This indicates that more than 1-in-4 American jobs brought back to the U.S. from an across-the-board tariff on China would be U.S. manufacturing jobs.
“While US production costs in many industries remain higher than in China, that is not the whole story,” researchers said in their findings. “Locating production in the US offers other advantages, including lower transportation costs, more logistical flexibility, and closer connectedness to consumer markets, distributors, and senior management. Relocating in the US also insulates companies against the uncertainty of potential future trade tensions.”
The 25 percent tariff on China, the CPA study finds, would “speed up the process” of reshoring jobs back to the U.S. specifically in industries like apparel.
Already, President Trump has imposed a 25 percent tariff on steel imports, a 10 percent tariff on aluminum imports, and recently hiked tariffs on $200 billion worth of Chinese imports to 25 percent. Likewise, the Trump administration is reviewing hiking tariffs on an additional $300 billion worth of Chinese imports to 25 percent.
Trump’s economic nationalist agenda to bring U.S. jobs and industry back to the American economy while also protecting American workers and industry from unfair foreign competition has been met with disdain from free trade lobbyists and the GOP mega-donor Koch brothers.
The donor class’ free trade absolutism, though, is not shared by the country’s working and middle class. Recent Harvard-Harris polling found that about 8-in-10 U.S. voters supported reciprocal tariffs, including more than 90 percent of conservatives and 88 percent of registered Republican voters.
The outsourcing and offshoring of American jobs to foreign countries is a business model that has been used by multinational corporations with little to no government repercussions. Corporations like General Motors, AT&T, Harley-Davidson, Ralph Lauren, Nike, Verizon, Dexcom, and IBM have all laid off Americans in order to send their jobs overseas to countries like China, India, and the Philippines.
Since the North American Free Trade Agreement’s (NAFTA) enactment, five million American manufacturing jobs have been eliminated from the American economy. The vast elimination of working and middle-class jobs and depressed U.S. wages due to NAFTA has coincided with a nearly 600 percent increase in trade deficits.
One former steel town in West Virginia lost 94 percent of its steel jobs because of NAFTA, with nearly 10,000 workers in the town being displaced from the steel industry.
John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder.