Trade generated $2.6 trillion in gains — while destroying 2.4 million jobs in communities that never recovered. The fix is fair rules, not blanket tariffs.
We're a policy platform with 50 researched positions on every major issue. This page breaks down our trade plan — but there's much more to explore.
For three decades, American trade policy was built on a simple promise: open markets would create more winners than losers, and the gains would be broadly shared. The first part was true. The second was not. Trade generated trillions in aggregate gains — and concentrated them among shareholders and consumers while devastating the communities that made things.
NAFTA (1994) was the template. Proponents promised 200,000 new American jobs from expanded trade with Mexico and Canada. The Economic Policy Institute estimates the actual result was a net loss of 682,000 jobs, concentrated in manufacturing. The trade deficit with Mexico grew from $1.3 billion in 1993 to over $130 billion by 2022. Factories in the Midwest, the South, and Appalachia closed and moved production to Mexican maquiladoras where wages were a fraction of American levels and environmental regulations were minimal. The workers left behind never recovered. The communities they lived in never recovered.
China's WTO entry (2001) was the accelerant. Both parties supported it, arguing that integrating China into the global trading system would liberalize its economy and political system. Neither happened. What did happen was the "China Shock" — a term coined by MIT economist David Autor and colleagues — which destroyed an estimated 2.4 million American manufacturing jobs between 1999 and 2011. These were not marginal jobs in declining industries. They were middle- class careers in communities that had no alternative economic base. The communities hit hardest by the China Shock experienced rising poverty, declining life expectancy, increased opioid use, and political radicalization.
Who gained vs. who lost: the gains from trade — lower consumer prices, higher corporate profits, access to cheaper inputs — accrued broadly to consumers and narrowly to shareholders. The losses — factory closures, job destruction, community collapse — were concentrated in specific regions and demographics, predominantly non-college-educated workers in manufacturing-dependent communities. The economists who designed these trade agreements assumed the winners would compensate the losers through retraining programs and social spending. That never happened. Trade Adjustment Assistance was chronically underfunded, retraining programs were ineffective, and the political system moved on to the next trade deal.
The result is a country where trade has been enormously profitable in aggregate and devastating in particular — where the aggregate GDP grew while specific communities died. The Common Good plan starts from the position that trade policy must be judged not by its aggregate effects but by its distributional ones: who gains, who loses, and what the government does about the gap.
No. The evidence from the Trump-era tariffs is clear: blanket tariffs are a tax on American consumers that rarely achieve their stated goals. The trade deficit didn't shrink. Manufacturing jobs didn't return in meaningful numbers. And the costs were passed directly to American families and businesses.
Costs passed to consumers. Multiple studies — from the Federal Reserve Bank of New York, the National Bureau of Economic Research, and the Peterson Institute — found that the tariffs imposed on Chinese goods in 2018-2019 were almost entirely passed through to American consumers and businesses as higher prices. The average American household paid an estimated $831 more per year in higher costs. Washing machines increased 12% in price. Steel tariffs raised costs for American manufacturers who use steel as an input, making their products less competitive — the opposite of the stated goal.
Retaliatory tariffs hurt farmers. China, the EU, Canada, and Mexico all imposed retaliatory tariffs on American exports — primarily agricultural products. American soybean exports to China fell 75%. The federal government spent $28 billion in emergency agricultural bailouts — more than the auto industry received during the 2008 financial crisis. The tariffs that were supposed to help American workers ended up requiring a bailout for American farmers.
The trade deficit didn't shrink. The goods trade deficit was $796 billion in 2017 (before tariffs) and $912 billion in 2022 (after four years of tariffs). The bilateral deficit with China declined, but the total deficit increased because imports shifted to Vietnam, Mexico, and other countries — a pattern economists call "trade diversion" that tariffs predictably produce.
What works instead: targeted tariffs on specific goods where foreign governments engage in dumping or provide illegal subsidies can be effective trade enforcement tools. But blanket tariffs — 10%, 25%, 60% on all goods from a country — are a blunt instrument that raises costs for everyone while protecting no one in particular. The Common Good plan replaces tariff wars with strategic trade enforcement, multilateral coalitions, and domestic industrial policy.
The Common Good plan replaces both naive free trade and counterproductive tariff wars with a comprehensive fair trade framework: trade agreements with enforceable standards, domestic industrial investment, worker support programs that actually work, and supply chain security for critical goods.
The plan is built on six core provisions that address the failures of both the free-trade consensus and the tariff-war alternative.
For the complete trade framework with legislative detail, see the full trade issue page and the labor policy.
The United States is not the only country navigating globalization. Germany, Japan, and South Korea all maintain robust manufacturing sectors, manage trade relationships strategically, and invest heavily in worker retraining. Their approaches offer lessons for what works — and what the US has gotten wrong.
| Country | Trade Balance | Mfg % GDP | Adjustment Programs | Retraining Spend | Key Exports |
|---|---|---|---|---|---|
| United States | -$773B | 11% | TAP (underfunded) | 0.03% GDP | Tech, agriculture, finance |
| Germany | +$211B | 19% | Kurzarbeit + retraining | 0.20% GDP | Autos, machinery, chemicals |
| Japan | -$65B | 20% | METI industrial policy | 0.10% GDP | Autos, electronics, machinery |
| South Korea | +$47B | 25% | Active labor market policy | 0.35% GDP | Semiconductors, ships, autos |
| China | +$877B | 28% | State-directed industrial | State-funded | Electronics, machinery, textiles |
| Mexico | +$131B (w/US) | 17% | Limited | Minimal | Autos, electronics, oil |
Germany's Kurzarbeit program — which subsidizes reduced hours instead of layoffs during downturns — has kept manufacturing employment stable through multiple recessions. Germany spends nearly 7x what the US does (as a share of GDP) on active labor market policies and worker retraining. The result: a trade surplus, a manufacturing sector twice the US share of GDP, and industrial wages that support a middle-class lifestyle — at a workforce cost significantly higher than the US.
South Korea spends more than 10x the US share of GDP on retraining and has built a globally dominant semiconductor and shipbuilding industry through deliberate industrial policy. These countries don't oppose trade — they manage it, invest in it, and ensure that the workforce has the skills to compete. The US chose to open markets and walk away from the workers. The Common Good plan chooses differently.
Since 2001, more than 70,000 American factories have closed. The manufacturing workforce has shrunk from 17.3 million in 2000 to roughly 12.9 million today. The debate over whether trade or automation is the primary cause misses the point: both matter, and the US failed to respond to either.
The automation vs. trade debate has consumed academic economics for two decades. Research suggests both are significant: automation has increased manufacturing productivity, meaning fewer workers produce more output; trade — particularly the China Shock — destroyed jobs directly by moving production overseas. The relative contribution varies by industry and region. But the policy failure is the same regardless of cause: the US did nothing meaningful to help the workers and communities affected by either force.
Which jobs are coming back and which aren't: low-skill, labor-intensive manufacturing — textiles, basic assembly, commodity production — is unlikely to return to the US in significant volume. Labor costs in Bangladesh, Vietnam, and other manufacturing hubs are too low for American workers to compete without tariffs that would dramatically raise consumer prices. But advanced manufacturing — semiconductors, electric vehicles, clean energy components, pharmaceuticals, aerospace — is actively reshoring, driven by the CHIPS Act, IRA incentives, and supply chain security concerns. These jobs require higher skills and pay higher wages.
What Germany and Japan do differently: both countries maintain manufacturing sectors roughly twice the US share of GDP — at wages equal to or higher than American levels. They do this through continuous investment in vocational training, industrial policy that supports domestic production, R&D tax credits that incentivize process innovation, and labor market institutions (like Germany's works councils and Japan's lifetime employment norms) that distribute productivity gains to workers rather than solely to shareholders.
The Common Good plan invests in the manufacturing sectors that can compete — advanced manufacturing, clean energy, semiconductors, critical supply chains — while providing genuine transition support for workers and communities affected by both trade and automation. The goal is not to recreate 1960s manufacturing employment. It's to build a 21st-century industrial base that pays middle-class wages and doesn't depend on suppressing labor costs or ignoring environmental damage. See the labor policy and the climate plan for how manufacturing, clean energy, and worker support fit together.
Trade policy is uniquely susceptible to myth-making — both from free-trade ideologues who deny the costs and from protectionists who deny the benefits. Here are four myths — and what the evidence shows.
Myth: "Tariffs protect American jobs."
Reality: Blanket tariffs protect specific industries while raising costs for every other industry and every consumer. Steel tariffs protected roughly 8,700 steel jobs while destroying an estimated 75,000 jobs in steel-consuming industries that faced higher input costs. Tariffs on Chinese goods raised consumer prices by $831 per household per year while the trade deficit with China barely changed — imports simply shifted to Vietnam, Mexico, and other countries. Targeted tariffs on dumped goods can work. Blanket tariffs are a tax on American families that benefit specific industries at everyone else's expense.
Myth: "Free trade lifts all boats."
Reality: Free trade lifts the aggregate — total GDP grows, total consumer surplus increases, total corporate profits rise. But "all boats" is demonstrably false. The 2.4 million workers who lost jobs to the China Shock did not see their boats lifted. The communities where factories closed and were never replaced did not see their boats lifted. Trade creates winners and losers. The winners — shareholders, consumers of cheap goods, multinational corporations — gained trillions. The losers — manufacturing workers, factory towns, the Rust Belt — lost their livelihoods, their communities, and in measurable terms, years of life expectancy. The promise that gains would be shared was broken.
Myth: "Manufacturing jobs are gone forever."
Reality: Since the passage of the CHIPS Act and IRA, the US has added approximately 600,000 manufacturing jobs. TSMC, Samsung, Intel, and others are building semiconductor fabs in the US. Battery factories, solar panel manufacturers, and EV assembly plants are opening across the country. Manufacturing employment will never return to its 1979 peak of 19.6 million — automation has permanently changed labor intensity — but the sector is growing again in advanced, high-wage segments. Germany and Japan prove that wealthy nations can maintain robust manufacturing sectors with active industrial policy and workforce investment.
Myth: "Trade deficits mean we're losing."
Reality: A trade deficit is not inherently good or bad — it depends on what's driving it and who bears the costs. Germany runs a trade surplus; the UK runs a deficit. Both are wealthy nations. The problem with the US trade deficit is structural: it reflects a decades-long exchange in which the US imports manufactured goods (destroying domestic jobs) and exports financial assets (enriching Wall Street). The deficit itself isn't the disease — it's a symptom of trade rules that prioritize capital mobility over worker welfare. The Common Good plan addresses the underlying causes — labor arbitrage, currency manipulation, missing worker support — rather than obsessing over the headline number. See the full trade policy for details.
Click any question to expand the answer.
Have a question not answered here? Read the full trade issue page or visit our site-wide FAQ.
Check back soon for policy analysis of trade news.
2.4 million jobs lost. 70,000 factories closed. The gains went to shareholders while communities collapsed. Read the full plan for fair trade rules with sources, evidence, and implementation details.