The U.S. trade deficit with China has reduced sharply employment stateside since 2001, according to "The China Toll Deepens," a new report from the Economic Policy Institute in Washington, D.C. The finding from the EPI’s Robert E. Scott and Zane Mokhiber "examines the job impacts of trade by subtracting the job opportunities lost to imports from those gained through exports."

Their thesis is simple. The bilateral trade deficit in goods between the planet’s two biggest economies is the main cause of the U.S. employment losses that are concentrated in the American manufacturing sector.

Since China entered the World Trade Organization in 2001, there has been a "loss of 3.4 million U.S. jobs, including 1.3 million jobs lost since 2008 (the first full year of the Great Recession, which technically began at the end of 2007)," the EPI researchers found. "Nearly three-fourths (74.4 percent) of the jobs lost between 2001 and 2017 were in manufacturing (2.5 million manufacturing jobs lost)."

The impacts of the China-U.S. trade imbalance on less-educated U.S. workers’ wage-income concerns Scott and Mokhiber. "Growing trade deficits are also associated with wage losses not just for manufacturing workers but for all workers economy-wide who don’t have a college degree," according to the EPI duo.

California, which has the world’s fifth biggest economy, topped the charts with 562,000 jobs lost, or 3.34 percent of the Golden State’s total labor force of 16.8 million jobs last year. Silicon Valley firms outsourcing production and Southern California apparel firms contracting out are two factors driving this trend. Following California in the total job loss rankings are Texas (314,000), New York (183,500), Illinois (148,200) and Pennsylvania (136,100).

The U.S.-China Business Council, Inc. (USCBC), a trade group for stateside corporations operating in China, disputed the new EPI report.

"EPI’s latest study is still based on the faulty assumption that every product imported from China would have been made in the U.S. otherwise," the trade group’s senior vice president, Erin Ennis, said in a statement. "Much of what we import from China replaces imports from other countries, not products we make in the U.S. today. A jobs impact study that ignores the facts undermines its own credibility."

The EPI and USCBC do agree on one thing, though. President Trump’s policy of imposing tariffs, or taxes, on Chinese imports to the U.S. is not a solution to trade relations between both nations.

Scott and Mokhiber make the case for China to reform its labor market in ways that boost consumers’ purchasing power in the most populous nation for American goods. "For China to become a better market for U.S. exports, it needed to stimulate the growth of domestic consumption through policies that would allow workers to organize and bargain collectively, thus raising wages."

The USCBC points to other policy areas for addressing the China-U.S. trade deficit.

"The key is to make sure our companies and workers stay competitive and remain global leaders in manufacturing — and that means sensible innovation, education, tax, healthcare, and energy policies," said the USCBC’s Ennis. "The answer is not to build walls around the U.S. to isolate ourselves from trade with China."

We turn to the president’s trade policy of imposing tariffs on Chinese goods entering the U.S. It has spurred a tit-for-tat escalation of tariffs between the two nations. On a related note, the International Monetary Fund’s World Economic Outlook suggests that a tariff-friendly trade policy will act as a headwind on growth.

"In the United States, momentum is still strong as fiscal stimulus continues to increase, but the forecast for 2019 has been revised down due to recently announced trade measures, including the tariffs imposed on $200 billion of U.S. imports from China," according to the IMF report.