Ep. 218: Gordon Hanson on US-China Trade War, Immigration and US Elections
May 31, 2024
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Gordon Hanson, a Harvard professor, discusses US-China trade war, immigration, and elections. Topics include China's rise, WTO entry effects, Japan vs. Asia Tigers, US regional job loss, impact of tariffs, immigration's economic effects, and energy transition policies under Biden administration.
China's economic rise was influenced by embracing globalization before joining the WTO, disrupting global trade patterns, and creating winners and losers.
US manufacturing suffered significant job losses and factory closures due to China's competitive labor-intensive sectors, impacting regional economies worldwide.
US trade policies, like tariffs imposed by the Trump administration, aimed to address job losses caused by globalization and China's ascent, highlighting challenges in global supply chains and modern manufacturing dynamics.
Deep dives
Insights on Globalization and China's Economic Rise
China's economic rise was influenced by factors like embracing globalization before joining the WTO, disrupting global trade patterns, and creating winners and losers. The impact of China's rise on US manufacturing job loss was significant, leading to job losses, factory closures, and challenges in finding new employment. The narrative of China exploiting the US through trade agreements oversimplifies the complexities of global trade dynamics.
Implications of China's Economic Rise on US Manufacturing
The China trade shock had profound effects on US manufacturing, with job losses and factory closures linked to China's competitiveness in labor-intensive sectors. While the US tried to adapt to China's economic ascent by welcoming it into global trade, the rapid speed and narrow focus of China's specialization created disruptions for regional economies in the US and worldwide.
Challenges of Trade Policies and Job Loss in the US
US trade policies, like tariffs imposed by the Trump administration, aimed to address job losses caused by globalization and China's ascent. However, the impact of tariffs on manufacturing employment was minimal, with challenges stemming from complex global supply chains and shifts in modern manufacturing dynamics. Trade policies need to address the complexities of global trade and job displacement more effectively.
Navigating Immigration and Energy Transition Policies
Immigration and energy transition policies play pivotal roles in shaping the US economy. Immigration contributes to economic efficiency through labor market arbitrage, although regional impacts differ. Energy transition policies, like those in the IRA, focus on green energy incentives to electrify and decarbonize the economy. Integration of regional electricity grids is identified as a crucial step in achieving sustainable energy practices.
Advice for Students Entering the Workforce and Book Recommendations
Students entering the workforce should focus on developing core skills like problem-solving, analysis, and interpersonal communication to navigate evolving career landscapes. Key book recommendations include insights from Robert Caro's biography of Robert Moses and Deborah and James Fallows' 'Our Town' for perspectives on urban development and community regeneration. Exploring online resources like the 'Reimagining the Economy' project offers valuable insights into labor market trends and government funding allocations.
Gordon Hanson is the Peter Wertheim Professor in Urban Policy at Harvard Kennedy School (HKS). He is also chair of the Social and Urban Policy Area at HKS, a research associate at the National Bureau of Economic Research, and a member of the Council on Foreign Relations. Gordon’s current research addresses the causes and consequences of regional job loss, effectiveness of place-based policies in alleviating regional economic distress, and the labour market consequences of the energy transition. This work is part of the Reimagining the Economy project at HKS, which Gordon co-directs with Dani Rodrik. In this podcast we discuss the rise of China and its impact on the US, whether WTO entry mattered and which sectors played by the rules, comparing the rise of Japan and Asia Tigers, and much more.
