The United States, as stated by Treasury Secretary Janet Yellen, will not accept a flood of artificially cheap Chinese products that threaten the viability of American and other foreign firms.
Yellen emphasized concerns about China’s industrial policies, particularly in sectors like electric vehicles, batteries, and solar products, where Chinese government subsidies have led to overcapacity and the flooding of global markets with low-priced goods. This stance aims to protect American industries from being decimated by subsidized Chinese imports, similar to what happened in the steel sector a decade ago
Cheap Chinese products have had a significant impact on the US economy, particularly in terms of job displacement and wage stagnation. The surge in imports from China has led to the loss of millions of jobs in the US, with a disproportionate impact on the manufacturing sector, which pays higher wages and provides better benefits than most other industries.
This job loss has pushed many workers into lower-paying industries or out of the labor market altogether, contributing to wage stagnation and income inequality in the US.
Moreover, the low cost of Chinese products has been artificially maintained through suppression of labor rights and wages, further exacerbating the negative impact on US workers.
The US trade deficit with China has also contributed to the country’s foreign debt, fragile macroeconomic environment, and loss of export capacity.
On the other hand, the influx of cheap Chinese goods has helped US households cope with stagnating incomes by providing affordable consumer goods.
However, this benefit has been accompanied by significant job losses and wage stagnation, which have had long-term negative consequences for the US economy.
In summary, the impact of cheap Chinese products on the US economy has been a mixed bag, with both positive and negative effects. While affordable consumer goods have benefited US households, the job losses and wage stagnation resulting from the surge in Chinese imports have had significant negative consequences for the US economy and its workers.