| Abstract: |
This paper finds a link between the sharp drop in U.S. manufacturing
employment beginning in 2001 and a change in U.S. trade policy that eliminated
potential tariff increases on Chinese imports. Industries where the threat of
tariff hikes declines the most experience more severe employment losses along
with larger increases in the value of imports from China and the number of
firms engaged in China-U.S. trade. These results are robust to other potential
explanations of the employment loss, and we show that the U.S. employment
trends differ from those in the EU, where there was no change in policy. |