United States President Donald Trump’s trade war with China has caused a peak loss of 245,000 US jobs, but a gradual scaling back of tariffs on both sides would boost growth and lead to an additional 145,000 jobs by 2025, a study commissioned by the US-China Business Council (USCBC) shows.
The group, which represents major US companies doing business in China, said the study by Oxford Economics also includes an “escalation scenario” that estimates a significant decoupling of the world’s two largest economies could shrink US gross domestic product by $1.6 trillion over the next five years. This could result in 732,000 fewer US jobs in 2022 and 320,000 fewer jobs by 2025, it said.
The study was released just days before President-elect Joe Biden is set to take office and begin a major analysis of US trade policy, including consultations with democratic allies over punitive US tariffs imposed by Trump. Biden has said he plans no immediate changes to Trump’s tariffs, but said he will work with allies to pressure China to change its trade behaviour.
USCBC President Craig Allen, who has been supportive of Trump’s efforts to change China’s trade and technology transfer policies, said it was important that the group articulate the consequences of policy choices in the US-China relationship.
“In the case of the tariffs, it’s very important that we understand the full economic cost of these choices,” Allen told a press briefing.
The study estimates that US exports to China support 1.2 million US jobs and that Chinese multinational companies directly employ 197,000 Americans, while US companies invested $105bn in China in 2019.
“With China forecast to drive around one-third of global growth over the next decade, maintaining market access to China is increasingly essential for U.S. businesses’ global success,” the study said.