A recent poll shows 42% of Americans believe tariffs will benefit the U.S. economy, a perspective in stark contrast to economists' warnings about trade wars raising prices and hurting the economy. This disconnect may stem from the impacts of free trade, particularly observed during the 'China Shock' when manufacturing jobs were devastated after China joined the WTO in 2001. Studies reveal that displaced workers struggled to find new employment, undermining the traditional economic theory of smooth job transitions, prompting a reevaluation of trade policies among economists.
Back in 2011, when the economists began unveiling their research, one of their big, eye-opening findings was that, for displaced workers, "the adjustment process was wrenching, slow and scarring."
No research has made that more abundantly clear than a series of studies over the last decade-plus on what's known as the 'China Shock.'
Sure, they said, there would be some losers. But those losers would get new jobs in a growing economy and basically everything would ultimately be fine. Everything turned out not to be fine.
These studies have found that as a flood of Chinese imports came rushing into the U.S., it destroyed well over a million manufacturing jobs and created basically miniature depressions in communities around the country.
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