New Study Shows China Tariffs Could Create Up to One Million Jobs

The Coalition for a Prosperous America (CPA) recently released the results of an updated study on the impact of a permanent 25 percent across-the-board tariff on all imports from China (PATB-25), showing such a tariff would stimulate growth in GDP and jobs in the US economy.

When factoring in the impacts of China retaliation, USDA assistance for farmers, and federal reinvestment of tariff revenue, CPA found that the overall stimulus to the US economy would result in a $167 billion boost to US GDP, along with 1.05 million additional jobs, in 2024.

“A permanent, across-the-board, 25 percent tariff on all US imports from China would deliver significant, tangible benefits to the US economy,” said CPA Chief Economist Jeff Ferry. “The tariff would stimulate domestic production, beginning with small increases in US manufacturing and escalating over time. The certainty of a permanent tariff would be more effective than today’s tariffs and speed up business decisions to move production out of China, with a portion of that production coming back home.”

This study, by CPA economists Jeff Ferry and Steven Byers builds on a previous study in May that examined the effects of a permanent, across-the-board 25 percent tariff on US imports from China. The new study includes the effects of Chinese retaliation on US exports to China, US Department of Agriculture (USDA) programs to support agriculture, and federal spending of tariff revenues.

“The new CPA study further confirms that tariffs work, and their benefits can be optimized,” said CPA Chairman Dan DiMicco. “China’s rise has come at the expense of US industry and manufacturing jobs. The United States will come out the winner when it stands up to Beijing’s 25-year-old trade war against America.”

The new study includes a range of scenarios involving permanent tariffs where net gains in employment range from 642,000 additional jobs up to 1.05 million. Other studies that have found that tariffs depress the US economy rely on unrealistic assumptions on international production costs and exaggerated effects on US consumer prices.

“The ruling party in China uses a whole-of-government approach to advance its economic, military, and geopolitical goals,” said Michael Stumo, CEO of the CPA. “Human rights are abused in the process. CPA has corrected the flaws of past economic modeling, which is confirmed by the experience of the last year and shows that domestic production and employment can be boosted with trade intervention. A permanent across-the-board tariff against China would be pro-growth and would be effective in preventing the further erosion of US wealth and power.”

TMA is working in cooperation with CPA on national and international trade issues.