While it is true that foreign competition may have some negative impact on US workers, what can be said about the American jobs that are bolstered by import activity? In a May 2021 study, Trade Partnership Worldwide (TPW) found that every US state experienced a net job increase due to imports. In other words, more jobs were created directly or indirectly because of importing goods than jobs lost. TPW’s timely coverage provides a more holistic view of trade policy’s impact on US employment and underlines the American middle class’s stake in policy decisions.
The new research highlights the significant impacts of US trade partnerships on American workers and industries. TPW found that in 2018, imported goods and services directly or indirectly supported more than 21 million jobs in the United States, comprising on average 10.6% of total employment in each state. These import-related jobs paid competitive, “middle-class” salaries to 2.5 million union members, 6.2 million minority workers, and 9.4 million women. TPW also indicated that 96% of companies that reported they import were small or medium-sized firms—businesses that accounted for 83% of total private US employment in 2014. While it is true that import activity does cause some job loss, the report’s findings are generally positive, indicating that individual livelihood, household income, and small American businesses benefit from foreign trade.
In recent decades, China and other emerging manufacturing hubs in Asia like Vietnam, Indonesia, Thailand, and Bangladesh have increased export activity at an affordable cost to the United States. Though recent undertones in Congress suggest that the United States wishes to establish increasingly self-sufficient supply chains, it is important to note how everyday Americans benefit from US trade with Asia. In 2018, US imports from China, Japan, and South Korea alone created a net positive of 2.4 million jobs.
On a macro level, importing raw materials from Asia decreases production costs for American businesses, boosting the competitiveness of US goods in the global market. Imports from emerging markets in Asia also lower the cost of goods and services for American families, enabling them to spend money on education and recreational activities and thus indirectly creating jobs in these sectors. According to a report by the Peterson Institute for International Economics, access to imports boosts the purchasing power of the average American household by an estimated $18,000 annually, a powerful indirect effect of imports.
Conversely, the TPW report also noted that when the US government places import tariffs on foreign goods and services, the economic burden falls on American consumers and businesses. Punitive trade policies against imports disrupt the output of American factories by creating a dearth of affordable materials, increasing production costs, potentially impeding innovation, and jeopardizing jobs as firms are forced to cut expenses. Significantly, import tariffs also cause declines in US exports since foreign customers who generate their income through US consumption have less economic capacity to buy American goods. Thus, Americans suffer from increased prices and fewer jobs.
Asia continues to coalesce as an economic powerhouse and active participant in global governance structures. A total of 210 of the world’s 500 largest firms are now headquartered there, and by 2040 the region’s middle class is projected to account for 40% of the world’s total consumption. Given that US Asia strongly supports American workers and businesses, continued US engagement with this growing region is more imperative now than ever before.
Reid Arné is a participant in the Young Professionals Program at the East-West Center in Washington. He is a graduate student at Chulalongkorn University concentrating in international development studies. His research interests include economic development and international financial policy.
Sayan Dochinkhuu is a participant in the Young Professionals Program at the East-West Center in Washington. He is a graduate student at Texas A&M University's Bush School of Government and Public Service studying International Affairs, with a concentration in US foreign policy in East Asia and International Development.