The huge imbalance between the United States and China in trade of manufactured goods is continuing to exacerbate the loss of jobs in the U.S., according to a new report from the Manufacturers Alliance for Productivity and Innovation.
To put it in perspective, the U.S. trade deficit with China accounts for 71% of America's total trade deficit and provides almost half of China's total trade surplus, according to Ernest H. Preeg, MAPI senior advisor for International Trade and Finance.
The U.S. global trade deficit in manufactures rose by 7%, or $15 billion in the first half of 2012 compared to 2011, the study reports. At the same time, China saw its trade surplus jump 24%, or $67 billion, during the same period.
The growth in U.S. exports did pick up pace in the first half of 2012. While U.S. manufactured exports increased by 9% ($48 billion) compared to 2011, imports rose by 8% ($62 billion). But Chinese manufactured exports rose by 11% ($80 billion) in the first six months of the year while its imports rose by only 2% ($13 billion).
"The large increase in the Chinese surplus comes at the expense of growing deficits abroad, which are especially difficult to handle at this time," observed Preeg.
Manufactured goods account for approximately 95% of Chinese and 75% of U.S. merchandise exports, MAPI explains.
The study points out that U.S. manufactured imports from China are more than six times larger than U.S. exports to China. And that is having a serious impact on the job-starved U.S. economy.
"The $169 billion three-year increase in the global U.S. deficit, from $326 billion in calendar year 2009 to a projected $495 billion in 2012, has resulted in a trade related loss of 700,000 to 1.4 million U.S. manufacturing jobs, or almost 10% of total manufacturing employment," observed Preeg. "This includes an estimated 130,000-260,000 jobs in 2012."
Last week, the Economic Policy Institute reported that the trade deficit with China had been responsible for 2.1 million U.S. manufacturing jobs lost since 2001.