A new report from a U.S. think tank is challenging U.S. Treasury Secretary Scott Bessent’s claim that 3.7 million American jobs were lost due to increased imports from China. The Civitas Institute’s recent analysis suggests that this figure may be significantly overstated, and trade with China may have actually supported manufacturing employment in some regions.
In their article titled “Did ‘China Shock’ Throw Millions of Americans Out of Work?”, published on Wednesday, the authors reviewed the academic studies cited by Secretary Bessent. They concluded that his estimate is likely exaggerated by a factor of at least two to four.
The report argues that the studies Bessent references estimate the effects of Chinese import growth by comparing job losses in regions most exposed to imports with those less exposed. “Such estimates can’t be used to calculate a nationwide job loss figure because cross-area comparisons miss effects that are common across all geographic areas,” the article states.
Contrary to the claim that increased trade with China led to massive job losses, the report cites research indicating that manufacturing employment sometimes performed better in areas more exposed to Chinese import competition. The authors point out that no credible research supports the idea that the so-called “China Shock” caused job losses as large as suggested by Bessent, and that the decline in U.S. manufacturing employment began long before increased trade with China.
The analysis traces manufacturing job losses in the United States back over a century. Manufacturing employment peaked as a share of total employment before World War I, when farm workers still outnumbered factory workers, and has steadily declined in advanced economies for over 50 years. The authors highlight rising productivity, particularly through automation, as the primary driver of this long-term decline in manufacturing employment.
Between 2001 and 2024, while U.S. manufacturing jobs decreased by 3.6 million, real manufacturing value added increased by $800 billion. Over the same period, real value added per labor hour rose by 93 percent, indicating significant improvements in efficiency.
Citing economist Steve Rose, the article notes that as manufacturing’s share of employment shrank, management and professional jobs surged—from 18 percent of the workforce in 1960 to 32 percent by 2008. “The long decline in, first, agricultural and then manufacturing employment was really a steady upgrading of jobs that continues unabated,” the article concludes, framing these shifts as reflections of growing national affluence.
The report recommends that public policy focus on supporting workers impacted by economic transitions, rather than attributing job losses solely to trade with China. Addressing the challenges faced by workers due to technological advancements and globalization is essential for fostering a resilient economy.
