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KEY TAKEAWAYS
- An escalating trade war with China, where one of the U.S.’s top trading partners placed a 125% tariff on American goods, will likely make it more expensive for American companies to export products to China.
- American companies will likely slow hiring, and Trump’s tariffs are expected to reduce manufacturing employment by 500,000.
- The trade war will most likely impact farmers and agriculture companies, as the majority of the $150 billion in goods the U.S. exports to China, is made up of agricultural products.
Exports to China support thousands of U.S. jobs, and economists say those positions could be at risk if trade tensions between the two countries continue.
In an escalating trade war with China, the U.S. has a tariff of 145% on Chinese goods, and China has placed a tariff of 125% on U.S. goods. Economists say these trade tensions will likely make it more expensive for American businesses to import and export Chinese goods and could threaten the labor market.
According to a report by the U.S.-China Business Council, in 2022, an estimated 931,231 American jobs were supported by exports to China. However, hiring and jobs in sectors most exposed to Chinese trade could be in danger if the two countries cannot reach a long-term trade deal and elevated tariffs persist.
| A trade war could negatively impact American workers in sectors that rely on exports to China | |
|---|---|
| Sector | Jobs |
| Oilseeds and Grains | 178,736 |
| Education | 117,161 |
| Meat Products | 32,396 |
| Aerospace Products and Parts | 28,963 |
| Semiconductors and Components | 28,791 |
| Miscellaneous Crops | 28,391 |
| Pharmaceuticals and Medicines | 26,081 |
| Industrial Machinery | 24,373 |
| Navigational and Measuring Instruments | 22,961 |
| Motor Vehicles | 21,873 |
| Oil and Gas | 21,187 |
| Medical Equipment and Supplies | 20,929 |
| Miscellaneous Personal and Recreational | 18,636 |
| Royalties from Industrial Processes | 16,286 |
| Miscellaneous Business, Professional & Technology Services | 14,974 |
| Pulp and Paperboard Mill Products | 13,274 |
| Miscellaneous General Purpose Machinery | 12,678 |
| Petroleum and Coal Products | 12,011 |
| Personal Travel and Tourism | 11,470 |
| Basic Chemicals | 11,404 |
Tariffs have not hit the labor market yet; in March, few private-sector companies reported large-scale layoffs. However, as Trump’s back-and-forth tariffs continue to create uncertainty, Goldman Sachs economists say hiring will likely be the first economic element to feel the effects.
Chinese Tariffs On US Exports Could Hurt Farmers, Ranchers Most
More than one-fourth of the jobs that could be affected by Chinese tariffs on U.S. goods rely on agricultural trade with China. Farmers are worried they won’t be able to afford to sell to their previous trading partners. That could potentially, in turn, affect how they hire and fire workers.
“Farmers Union has always fought for fair trading relationships with other countries,” said Rob Larew, president of the National Farmers Union, in a statement on April 2. “We rely on stable markets and fair competition to thrive, but the administration’s actions today create instability at the expense of our family farmers.”
The Trump administration has discussed some emergency aid to farmers, as it did during its trade war with China in 2018, according to the New York Times. However, no aid has been put in place yet.