US must act constructively to seek trade relief

In an article in the Financial Times on April 9, White House Trade Advisor Peter Navarro claimed the trade deficit with China since 2001 caused the loss of millions of manufacturing jobs in the United States during the George W. Bush and Barack Obama administrations.

Navarro seems to be influenced by a report prepared by Robert E. Scott, senior economist at the Economic Policy Institute, and some other assessments. Due to the trade deficit with China, 3.4 million jobs were lost between 2001 and 2015, nearly three-fourths of which were in manufacturing, Scott wrote in the report issued in January 2017.

But Scott measures only the influence of the import-export balance on the total demand without taking into account the role imports and exports play in improving resource distribution efficiency, especially the role of imports in improving supply and increasing employment. His flawed methodology therefore makes his conclusion untenable.