Reactions in the United States to the Trump administration’s announcement on Saturday that it would refrain from imposing new tariffs on imports from China for the time being have been decidedly negative. One would expect criticism from the unions, the steel producers, and old economy manufacturing trade associations. After all, many seemed not the least bit concerned about burdening the economy with 25 percent duties on $50-$150 billion of Chinese imports and retaliation of similar scale against U.S. exports, as long as they secured for themselves a small bag of booty in the process. Trump’s “America-First” brand of economic nationalism was everything they had ever hoped for—and now it may be in retreat.

Likewise, one can understand why the administration’s decision to reconsider its approach to Chinese technology companies and Chinese technology transgressions makes the security hawks unhappy. Many of them have been peddling a self-perpetuating narrative that is one part fact to three parts innuendo, hearsay, and speculation that war (and not just the trade kind) between the United States and China is inevitable, and that there is very little scope for further cooperation. Why, they wonder, would Trump squander the leverage to compel real Chinese reform that was afforded by the results of the Section 301 investigation and ZTE’s existential predicament?

But I am most disappointed by those who present themselves as pro-trade, internationalist, cosmopolitan, and informed, but who seem strangely disappointed that the administration stepped back from the abyss. There was a point when these folks warned about the perils of Trump’s protectionist path, and screamed from the hilltops about how Trump’s unilateralism would kill the World Trade Organization. On Twitter, they goad Trump: “Trump blinked.” “Xi schooled Trump.” “U.S. credibility has been squandered” (as if it was somehow squandered THAT moment). For some of these people, disdain for Trump or the desire to be perceived as the most offended by his behavior is more important than supporting one of his rare decisions to do the right thing.

This weekend’s announcement, arguably, was the first piece of good trade policy news the Trump administration has delivered during its tumultuous 16-month reign. Yes, the administration’s trade policy has been a comedy of errors from the outset. Trump’s America First policies have betrayed his administration’s utter ignorance of the interdependence of the global economy, divided the country, and strained long-standing relationships with governments, businesses, and people on every continent. Had the president been remotely informed about international trade before taking office—instead of taking his primer courses on our time and on our dime—we might have been spared 16 months of wrenching policy mistakes.

The big takeaway from this weekend’s stand down is that the United States got taken by the Chinese, who’ve offered mere promises to purchase all sorts of U.S. exports and that the Trump administration has made fools of themselves in this process. Well, the Trump administration was always going to look foolish in this process. After all, who doesn’t look foolish pursuing nonsensical objectives, such as achieving bilateral trade balance, while breaking rules and strong-arming trade partners to get there? All Americans should be embarrassed by U.S. trade policy nowadays, but with respect to developments with China there is a better headline. Lost in an environment that is heavy on snark and light on measured analysis is that the worst of all outcomes—a deleterious trade war—has been avoided for now. Postponing a trade war is far superior to waging one, so as we spend the present lamenting the precarious near future, let’s also consider how we might make enduring trade peace more likely.

There is plenty of blame to go around for the deteriorating state of affairs, but let’s not forget that it is nearly a $750 billion relationship. It can’t be all bad. But despite that interdependence—or perhaps because of it—there are numerous sources of friction. The U.S. list of gripes famously includes subsidization of industry, the continued prominence of state-owned enterprises, currency manipulation, dumping, discrimination against U.S. companies, limited investment opportunities, closed services markets, relatively high tariffs, unfair labor practices, intellectual property theft, indigenous innovation policies, joint venture requirements, forced technology transfers, and many other allegations. These have been characterized as the vestiges of China’s incomplete transition to a market economy and there is definitely truth to it.

Chinese gripes are less familiar to Americans’ ears, but include the adverse treatment of China as a non-market economy in antidumping cases, an allegedly over-inclusive list of products subject to U.S. export controls, a crackdown on Chinese investment in the United States, U.S. blacklisting of Chinese information and communications technology firms, and other market access restrictions. 

Surely—and especially if the alternative is a ruinous trade war—many of these issues can be resolved. Washington and Beijing should go to the negotiating table, exchange wish lists, identify priorities, and put in writing an agreement that more fully opens both markets to trade in goods, services, and cross-border investment, and weeds out discriminatory innovation policies. Meanwhile, both governments should commit in that agreement to adopt less invasive, yet far more comprehensive, statistically valid approaches to screening technology products for cyber risks without compelling the sharing of source code or trade secrets (as described in this paper about cybersecurity and protectionism).

Efforts to reform the U.S. sugar program fell short last week when an amendment to the farm bill offered by Rep. Virginia Foxx (R‑North Carolina) was voted down by the lopsided margin of 137–278. Foxx couldn’t even persuade a majority of her fellow Republicans to support the measure, with only 96 voting in favor and 132 in opposition. Democrats, meanwhile, voted to preserve the sugar status quo by a split of 41–146. For all of the laments one hears about a lack of bipartisanship in Washington, the vote was a powerful reminder that both parties are still able to rally towards a common purpose when special interests and government power are threatened.

A report from Agri-Pulse nicely captures this dynamic (emphasis mine):

The top Democrat on the House Agriculture Committee, Collin Peterson of Minnesota, had expressed confidence that Democrats would help defeat the farm bill amendment despite their opposition to the overall legislation, and he delivered…Peterson, who represents one of the largest sugar-growing districts, said he gave an impassioned plea to fellow Democrats Wednesday morning to vote against the bill, reminding them of his leadership in opposing the overall bill. He said he told them that “the only thing I cared about was sugar and I needed their help.”

[House Agriculture Chairman Mike Conaway, R‑Texas], said he called in favors from GOP colleagues and credited GOP leaders for also helping defeat the sugar measure. He told reporters that he considered the amendment an “existential threat” to farm policy because it would have emboldened critics to go after other forms of commodity programs. 

Peterson hails from the party that claims to stand up for the little guy against economic elites while Conaway’s fellow partisans regularly profess skepticism of government and a belief in the free market. The reality, however, is plain for all to see. 

As I detail in a recent policy analysis, the U.S. sugar program is an absurd exercise in discredited central planning whereby the federal government deliberately restricts the supply of sugar in order to drive its price higher than it would otherwise be. Functioning as a wealth transfer from U.S. consumers and businesses to the sugar industry, the program is arguably the most egregious example of the federal government operating at the expense of the majority to benefit a well-connected minority. 

Notably, the reform effort led by Rep. Foxx—while a welcome step in the right direction—would have left significant amounts of the sugar program in place. Tariff rate quotas, for example, which restrain access to cheaper sugar from abroad would have been mostly untouched while government loans to sugar processors were slated to see their collateral demands only slightly raised. Yet even modest reform was too much to stomach for the sugar lobby. The fight for sugar sanity goes on. 

President Trump is seeking to apply tariffs to $50 billion of imports of some 1,300 products from China. He is targeting telecommunications and other high-technology sectors where he and others contend that American companies have, in effect, been forced to turn over their technology to Chinese partners – in some cases by revealing their trade secrets – in exchange for being allowed to do business in China and have access to the booming Chinese market. These tariffs are to be imposed outside the legal bounds of the WTO treaty through unilateral actions taken under Section 301 of the US Trade Act of 1974.

For many of these U.S. allegations about China, however, WTO obligations apply, and could provide more effective recourse. The various options under the WTO treaty for challenging Chinese trade practices will be explored in more detail in a forthcoming paper. This blog post focuses on one particular WTO obligation, covering trade secrets.

The Trump administration has been raising concerns about China’s failure to protect trade secrets, but evidently ignored so far is Article 39 of the TRIPS Agreement in the WTO treaty, which establishes a WTO obligation for the “Protection of Undisclosed Information.”[1] The United States was among the leaders in advocating the inclusion of Article 39 in the TRIPS Agreement as part of the WTO treaty, but the United States has, to date, not initiated an action in WTO dispute settlement claiming a violation by China of this WTO obligation.

Article 39 is a major innovation in intellectual property protection under international law. It is “the first multilateral acknowledgement of the essential role that trade secrets play in industry”[2] and “the first multilateral agreement to explicitly require member countries to provide protection for… ‘trade secrets.’”[3] One of the accomplishments of the Uruguay Round of multilateral trade negotiations that concluded the WTO treaty and established the WTO, “’[t]he inclusion of trade secrets under the TRIPS has been hailed as a major innovation.”[4]

This innovative WTO obligation offers an opportunity for challenging both the sufficiency of Chinese law and its application as part of a WTO complaint that China has not fulfilled its responsibility to enforce the protection of “undisclosed information.”

A specific focus of any WTO complaint by the United States relating to the failure of China to enforce the protection of trade secrets will be the continuing legal shortcomings of the Anti-Unfair Competition Law of China, which, as the Office of the United States Trade Representative has pointed out in its Special 301 Report for 2018, include “the overly narrow scope of covered actions and actors, the failure to address obstacles to injunctive relief, and the need to allow for evidentiary burden shifting in appropriate circumstances, in addition to other concerns.”[5] As USTR observes, in the 2017 update of the Anti-Unfair Competition Law, “despite long-term engagement from the United States and others – including from within China – China chose not to establish a stand-alone trade secrets law, and instead continued to seat important trade secrets provisions in the AUCL, an arrangement which contributes to definitional, conceptual, and practical shortcomings relating to trade secrets protection.”[6]

Those who would rather apply the broad illegal brush of unilateral tariffs instead of the sharp legal stiletto of a precise claim in WTO dispute settlement will protest that Article 39 has never been tested in a WTO dispute. This is true. Yet similar protests were heard ten and fifteen years ago against bringing legal claims in WTO dispute settlement under the Agreement on Technical Barriers to Trade and the Agreement on the Application of Sanitary and Phytosanitary Measures, which have both since been proven to be reliable tools for upholding and enforcing WTO obligations. Not having been tested is not the same as having been tried and found wanting. Until proven otherwise, a legal claim of a failure to protect “undisclosed information” under the novel obligation in Article 39 of the TRIPS Agreement must be seen as a potentially positive means to the end of protecting trade secrets.

It will certainly be said as well that proving a legal claim of illegal infringement of undisclosed information under Article 39 in WTO dispute settlement will not be easily accomplished. This also is true. As the complainant, the United States will have the burden of proving this and all its legal claims against China in WTO dispute settlement. In challenging the enforcement of the Chinese law, the United States, with respect to each alleged infringement of a trade secret, will have to show to the satisfaction of a WTO panel that there is in fact “undisclosed information” comprising a trade secret. Moreover, the United States will have to prove to the panel each particular instance of the illegal infringement of specific trade secrets.

All of this will necessarily involve the accumulation and the submission of a veritable mountain of evidence – not easy in any case and certainly not easy in a case against a WTO Member with such an opaque and elusive economic and administrative system. Without question, China presents a formidable climb in the necessary fact gathering for winning a WTO case. But the United States has climbed this mountain successfully before in a series of complicated WTO complaints it has brought and won against China. Why is there so little confidence that the world-class legal advocates at USTR can climb it again?

Lastly, it will doubtless be insisted by those busy imposing unilateral tariffs that pursuing this claim and others in the WTO will take much time and much trouble and that, even if the United States prevails, a remedy is at best several years away. This likewise is true. But how much time and how much trouble are likely to result from the retaliatory legal actions and the retaliatory trade actions that are the certain consequence of tariffs imposed by the United States unilaterally and outside the legal framework of the WTO? Will US trade secrets be any better protected during the time it would take instead to seek and implement a WTO judgment under Article 39? And what other untold and untoward consequences will there be from an abandonment by the United States of America of the international rule of law?

[2] Francois Dessemontet, “Protection of Trade Secrets and Confidential Information,” para. 3, at https://www.unil.ch/files/live/sites/cedidac/files/Articles/Protection%20Trade%20Secrets.pdf .

[3] Douglas C. Lippoldt and Mark F. Schulttz, “Trade Secrets, Innovation and the WTO,” Think Piece, E15 Expert Group on Trade and Innovation, E15 Initiative (Geneva: International Centre for Trade and Sustainable Development and World Economic Forum, August 2014), 1.

[4] Francois Dessemontet, “Protection of Trade Secrets and Confidential Information,” para. 2.

[5] Office of the United States Trade Representative, “2018 Special 301 Report” (April 27, 2018), 40.

[6] Ibid.

In a recent opinion piece for the Wall Street Journal I highlighted the plight of America’s Finest, a fishing vessel that, unless it is granted a waiver, will be prohibited from operating in U.S. waters due to its violation of the Jones Act. Although built in Washington state, the ship used steel, amounting to approximately 10 percent of the ship’s weight, that was cut and bent in the Netherlands. Coast Guard rules related to the Jones Act limit the amount of such foreign-modified steel to 1.5 percent (foreign-made raw steel, in contrast, can be used in unlimited amounts). Unsurprisingly the column has generated some notes of dissent, including a letter to the editor from Chris Philips, the managing editor of Fishermen’s News:

Regarding Colin Grabow’s “The Jones Act Drives America’s Finest Into Exile” (op-ed, April 30): The Jones Act is a cabotage rule similar to those enacted in most countries having a coastline, including Canada, Japan, South Korea, China, Germany and France. Mr. Grabow claims: “The shipyard says it simply wasn’t aware of the rule.” The shipyard in question has been building Jones Act vessels for more than 40 years. No one at Dakota Creek Industries, from the security guard to the president, is unaware of the rule.

Mr. Philips is correct that the Jones Act is a cabotage rule. His contention that it is similar to those of most countries, and those he lists in particular, however, is incorrect. The World Economic Forum, for example, has described the Jones Act as the “most restrictive example” of such laws and none of the countries listed by Philips feature the Jones Act’s requirement that ships engaged in cabotage trade be domestically built. Furthermore, both Germany and France as members of the European Union allow ships from other EU members to engage in cabotage. As for the claim by the shipyard which built the America’s Finest that it was “wasn’t aware of the rule,” a fair reading of my column makes plain that this was in reference not to the Jones Act, but rather its specific restriction that foreign-modified steel was limited to 1.5 percent of the ship’s weight. Indeed, I cited that 1.5 percent figure in the sentence preceding the claim about a lack of awareness. Philips then continues:

Mr. Grabow says the price of new vessels encourages the use of older ships. This is a no-brainer and a non sequitur. The same market forces apply to any depreciable asset world-wide. He also makes the oft-repeated claim that the Jones Act “made it difficult to ship emergency aid to Puerto Rico.” This is simply false.

Such comments reflect a failure to engage with the substance of what I wrote. By prohibiting access to foreign-built ships—or in this case, domestically-built ships which use too much foreign-worked steel—the Jones Act artificially drives up the cost of newer vessels. This, in turn, forces mariners to work on ships that are less safe and efficient than newer vessels. Indeed, the company which ordered America’s Finest was motivated in part by a desire for greater efficiency and to provide its employees with safety improvements. This is by no means a non sequitur, and gets to the core of the burden imposed by the Jones Act. Regarding aid to Puerto Rico, meanwhile, I stand by my words. Greenpeace, for example, says that it would have been easily able to transport donated supplies on a foreign-registered vessel to Puerto Rico absent the Jones Act, but instead the matter was “quite complicated.” Economist Thomas Grennes further notes that a “Norwegian-flag ship that was docked in New Orleans offered to take supplies to Puerto Rico, but the waiver expired before it could complete its voyage.” Philips concludes:

The Jones Act exists to protect our nation’s shipbuilding industry, which is critical to the security of this country. Those of us in the maritime and military fields understand this very well.

If this is so then the Jones Act, as typical of protectionist schemes, is a failure. In 2015 the U.S. Maritime Administration (MARAD) listed the number of active shipyards in the United States at 124 of which only 22 are “mid-sized to large shipyards capable of building naval ships and submarines, oceangoing cargo ships, drilling rigs and high-value, high-complexity mid-sized vessels.” In comparison, Japan currently has over 1,000 shipyards and it is estimated that China has over 2,000. Europe has roughly 60 shipyards capable of producing ships at least 150 meters in length. Measured in terms of output the picture is equally dismal, with the shipbuilding sector hugely dependent on government contracts. As MARAD itself notes, 10 out of 12 large deep-draft vessels delivered in 2014 were to U.S. government agencies and “98 out of the 150 new vessels ordered from U.S. private shipbuilders [that year] were for the U.S. military.” This lack of competitiveness and dependence on government is also evidenced by the fact that from 2006–2016 U.S. shipyards produced an average of merely 4.1 tankers and cargo ships per year. This is the opposite of a thriving sector. Such statistics are the tip of the iceberg in documenting the Jones Act’s myriad shortcomings, both in terms of ensuring a healthy shipbuilding sector and bolstering the country’s national security. 

If 2017 was the year of fiery trade talk, 2018 has been the year of provocative trade actions. During the first four months, President Trump imposed or announced intentions to impose tariffs on thousands of products stemming from five investigations conducted under three different, seldom-used laws. Talk of trade war is rampant and, as May begins, the troops are in formation—a circular formation, but a formation nonetheless! By Memorial Day, it should become much clearer whether their orders will be to shoot, hold fire, or demobilize.

What follows is a brief recap of the relevant trade policy actions of 2018 that have taken us to the present situation.

In January, the president imposed “safeguard” restrictions following two separate investigations of imports of large washers and solar cells, under Section 201 of the Trade Act of 1974. Tariffs and tariff rate quotas, respectively, were imposed for a period of four years in both cases against imports from most countries. These safeguard measures are absolutely stupid as a matter of economics, but relatively trivial as far as the impact on U.S.-China relations and the prospects for trade war are concerned.

In March, under the guise of acting to protect national security, Trump invoked Section 232 of the Trade Expansion Act of 1962 to impose tariffs on imported steel and aluminum from all countries. Soon after the announcement and before the tariffs took effect, Trump offered temporary exemptions to several trading partners to “encourage” them to play nice: buy more U.S. stuff; sell Americans less foreign stuff; increase NATO spending (EU countries); agree to U.S. terms on various aspects of the NAFTA renegotiations (Canada, Mexico); agree to export quotas (South Korea) and the temporary exemptions will be made permanent. Well, as the temporary exemption period was about to expire on May 1, the president extended the deadline to June 1. Presumably, if the NAFTA negotiations wrap up this month (apparently, a real possibility) and Trump gets what he wants, Canada and Mexico will be permanently exempted from the steel and aluminum tariffs. Congrats! It’s much less clear that the Europeans are willing to submit to these tactics. They’ve crafted a retaliation list and seem likely to go that route. The Chinese, whose steel and aluminum exports have been subject to the tariff since March 23, have already retaliated against a list of 128 U.S. products (amounting to about $3 billion in U.S. exports), including ethanol, wine, nuts, fruit, and a few other commodities. 

Although the “national security” restrictions on steel and aluminum are a more significant irritant than the safeguard restrictions on washers and solar cells, they still only amount to a flea bite on an elephant’s hide relative to Trump’s most recent, most provocative, and—some would argue—most justifiable action so far. At the beginning of April, Trump announced his intention to impose tariffs on 1,300 Chinese products accounting for about $50 billion of exports to the United States, as a result of an investigation into Chinese intellectual property and forced technology transfer policies, under Section 301 of the Trade Act of 1974. The “remedy” also includes instructions for the Treasury Department to publish new investment rules that will make it harder for Chinese companies to purchase U.S. technology and U.S. tech companies. Within a few hours of the U.S. announcement, China published a list of U.S. products, amounting to about $50 billion of exports to China (farm products, airplanes, autos, etc.), that it would subject to retaliatory duties of 25 percent should the U.S. measures take effect.

As of that point, between the 232 and the 301 cases, $106 billion of U.S.-China trade was in the crosshairs (about 15% of two-way trade). Then in reaction to China’s retaliation threat, Trump raised the stakes by instructing the USTR to identify another $100 billion of Chinese products to assess with tariffs. That list has not yet been published, but if it is and China responds commensurately (by targeting another $100 billion of U.S. exports), its list would have to include ALL U.S. exports to China because total U.S. goods exports to China in 2017 amounted to $130 billion. (Services exports add another $50 billion, but they’re not easy to hit with tariffs). The next likely target would be U.S. companies operating in China—discriminatory taxes, regulations, restrictions, etc. In any event, the amount of trade subject to tariffs ($306 billion) would begin to approach half the value of the two-way trade—a decidedly cataclysmic outcome.

President Trump seems to be aware of the stakes. Last month he tweeted that trade wars can be good and are winnable. He cites the bilateral U.S. trade deficit as evidence that China needs us more than we need them. Hopefully, he’s rational enough to realize that his avoidable actions would trigger a massive global economic contraction which, even if the United States is less hurt than others, history would not look kindly upon.

The month of May offers some opportunities to ratchet down the tensions and, even, find some solutions. The Trump administration’s trade policy team—USTR Robert Lighthizer, Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin, National Economic Council Director Larry Kudlow, and National Trade Council Director Peter Navarro—is in Beijing this week, presumably to get China to commit to certain actions that would enable tensions to be dialed down. Mid-month, the USTR is holding a hearing for the public airing of views about the Section 301 remedies, where it will be impressed upon the administration how costly a trade war would be. And, presumably, toward the end of the month is the momentous Korean Summit. If the president gets the results he’s looking for (whatever they may be) and Beijing is perceived as having played an important role in reaching that outcome, that could give Trump the cover he probably needs to put his pistols back in their holsters and focus on an effective, comprehensive U.S.-China free trade agreement. That should be the primary goal of U.S. trade policy during the Trump administration.

Cato trade policy analyst Colin Grabow explains the sordid details in today’s Wall Street Journal:

America’s Finest, a brand-new 264-foot fishing trawler, ought to be the pride of the fleet. As a newspaper in its birthplace of Anacortes, Wash., explained, the ship features an “on-board mechanized factory, fuel-efficient hull, and worker safety improvements”—priceless features for fishermen operating in the treacherous seas off Alaska. The ship is also said to have a smaller carbon footprint than any other fishing vessel in its region. According to Fishermen’s Finest, the company that ordered the ship, it would be the first new trawler purpose-built for the Pacific Northwest since 1989.

Sadly, it seems increasingly doubtful that the ship will ever ply its trade in U.S. waters. That’s because it contravenes the Jones Act, the 1920 law mandating, among other things, that ships carrying cargo between U.S. ports be domestically built

Writing in the New York Times recently, Louis Uchitelle calls for labor unions to be strengthened in order to prevent American firms from closing factories in the United States and shifting production abroad. Implicit in his argument is the notion that factories and the employment they provide are inherently desirable and the more the merrier. Before addressing this point, however, let’s first acknowledge that the decline in the number of factories and factory workers in the United States is overwhelmingly a story about automation and improved use of information technology rather than trade or outsourcing. A widely-cited study by researchers at Ball State University found that increases in productivity explain almost 88 percent of such job losses. Uchitelle’s contention, meanwhile, that greater unionization would stave off factory closures or even cause more to open in the United States is debatable. Sweden, the United Kingdom, and Japan, for example, all have significantly greater rates of unionization than the United States and yet have experienced higher percentage declines in manufacturing employment since 1990. And while he laments the “nearly neutered industrial unions” in the United States and their diminished proclivity to engage in strikes, a fondness for such worker protests hasn’t prevented France from similarly experiencing a greater percentage decline in factory jobs.

But even if increased unionization held the promise of fewer factory closures, it’s still not apparent why that outcome should be desirable. In fact, a blind obsession with the preservation of factory employment would almost assuredly make us worse off. Economies are not organisms encased in amber but systems that must continuously evolve and adapt. If a company decides to relocate a factory overseas it is because its task can be accomplished cheaper or more efficiently elsewhere. Realizing such efficiencies and doing more with less is the sine qua non of economic growth that frees up additional resources. While the job losses that result from such dislocations are apparent, invariably less appreciated and less noticed is that the resulting cost savings will allow for either new investments by the firm, cost savings to consumers in the form of lower prices—both of which contribute to new job creation—or some combination thereof. Trade and outsourcing destroy jobs, but also create new ones. One example of this dynamic is the economic relationship between the United States and China. Although China is frequently blamed for manufacturing job losses, less noticed is that trade with the country has also produced commensurate employment gains elsewhere in the economy (as well as within manufacturing—among the top export categories to China in 2016 were a combined $49 billion worth of aircraft, machinery, and vehicles). According to economist Maximiliano Dworkin of the Federal Reserve Bank of St. Louis, competition from China resulted in the loss of 800,000 jobs between 2000–2007, primarily in the production of computer and electronic goods, primary and fabricated metal products, furniture, and textiles. However, he also found that the economy gained a similar number of jobs in other sectors, such as services, construction, and wholesale and retail trade (significantly, Dworkin also says that as a result of savings to firms of lower production costs and access to cheaper Chinese-made goods, “U.S. consumers gained an average of $260 of extra spending per year for the rest of their lives.”). While we cannot know with exact precision which jobs were lost and which were gained as a direct result of this bilateral trade, it’s worth noting that Bureau of Labor Statistics data show average wages (a metric which does not include other forms of compensation such as health insurance) within the categories of “Textile, Apparel, and Furnishings Workers,” “Miscellaneous Textile, Apparel, and Furnishings Workers,” and “Textile, Apparel, and Furnishings Workers, All Other”—one of the areas in which the United States lost jobs to China—to range from $26,810 to $35,180. Among construction workers, meanwhile—an area the United States experienced job gains as a result of trade with China—average wages for “Construction Laborers” are $38,890, “Construction Trades Workers” are $48,620, and “Construction Equipment Operators” are higher still at $51,050. This does not mean that every production job lost was replaced by a superior one, but we should also dispense with the notion that lost factory and production jobs are invariably better paying than those lost to trade and outsourcing. Worth considering is the fact that hourly wages for production and nonsupervisory employees within manufacturing—currently $21.35—is lower than the private sector as a whole at $26.82. Furthermore, with the economy either at full employment or close to it, efforts to prevent the closure of factories means fewer workers available for new and potentially more lucrative employment elsewhere. None of this is to suggest that factory employment is undesirable or that shifting production overseas should be actively encouraged. Indeed, to the extent such jobs are being driven out by undue tax and regulatory burdens policy changes should be implemented to ameliorate them. Rather we must avoid the government placing its thumb on the scale, through policies which promote unionization or otherwise, and placing a particular premium on such jobs. Decisions about the location of production are best left to market forces whose ongoing quest for new efficiencies help unlock a higher standard of living. To actively thwart this or throw policy-driven sand in the gears of economic change is to halt such progress, and ultimately to harm workers.