Here’s the narrative: A shadowy, nefarious elite chose to open the U.S. to trade with China in 2000 and 2001, which sparked the loss of a very large number of manufacturing jobs and led to widespread deindustrialization.
Few narratives in the public square are uncontested — but this one comes close. It is held and advanced by Democrats, Republicans, the media, commentators, and economists.
And it is more wrong than right.
This is a graph of manufacturing employment. Its downward trend began decades before the "China shock," and the "China shock" did not change the trend. pic.twitter.com/DSn7WLgk6n
— Michael R. Strain (@MichaelRStrain) August 18, 2026
From my latest Project Syndicate column:
Did growing US trade with China following the 2000 decision to permanently normalize trade relations and China’s accession to the World Trade Organization in 2001 lead to a large reduction in manufacturing employment? In their 2013 paper, economists David Autor, David Dorn, and Gordon Hanson find that rising exposure to Chinese import competition is associated with a net reduction in US manufacturing employment of 1.5 million from 1990–2007. In work with Daron Acemoglu and Brendan Price, they find that up to 2.4 million jobs were lost through 2011 due to competition with Chinese imports.
To assess whether these are large numbers of job losses, place them in the context of broader US labor market dynamism. From 2000 to 2007, more than five million workers, including around 425,000 manufacturing workers, separated from their employers in a typical month. There was nothing special about that period—these magnitudes have been similar over the last five years.
From 2000-2007, in a typical month, over 5 million workers separated from their employers. During that period, in a typical month, around 425,000 manufacturing workers separated from their employers.
Contrast that with the "China shock" literature, which finds up to 2 million… pic.twitter.com/qJX0pyWt0G
— Michael R. Strain (@MichaelRStrain) August 13, 2026
Of course, trade liberalization increases both imports and exports. The “China shock” narrative ignores the latter. But when you factor in the export-driven employment gains from trade liberalization, it turns out that trade expansion’s effect on overall employment is a wash, just as standard economic theory would predict:
In a 2019 paper, Feenstra and his colleagues confirm the “China shock” result, finding that 1.9 million jobs were lost between 1991 and 2011, owing to import competition from China, with more jobs lost to competition from global imports. But they also find that a roughly equivalent number of jobs were gained due to export expansion.
I’d also highlight the confusion around “who” opened trade with China:
Nor was the US decision to trade with China made by a shadowy elite. China’s exports to America grew as a result of millions of decentralized, individual decisions. During the 1980s and 1990s, US consumers and businesses increasingly chose to purchase goods made in China, a trend that continued following China’s entry into the WTO.
Check out the column for my full argument. The conclusion:
Policymakers should not build walls around the economy or attempt to slow the pace of technological change. They should approach the future with optimism, not with fear — unburdened by the incorrect view that dynamism and economic liberalism are obstacles to long-term prosperity, rather than its key drivers.