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I’ve noticed that many people reflexively blame trade for the decline of the Rustbelt.Here’s one example:

Apologists for the outgoing trade regime often ignore that its impact was felt most acutely in particular regions, like the American Midwest. Researchers John Russo and Sherry Linkon describe how the closure of a steel mill in Youngstown, Ohio – the first of a wave of closures in the region – undermined the sense of worth and optimism among residents. Many can still recall better days, when employment was high, jobs paid well, workers were protected by strong unions and industrial labour provided a source of pride – not only because it produced tangible goods, but also because it was recognised as challenging, dangerous and important.

But is that true? Does trade explain the decline of steel employment from roughly 190,000 to 84,000?

If trade explained the loss of employment in steel mills, then you would expect to have seen a precipitous decline in domestic steel production. In fact, there’s been very little change in steel output during a period where employment has plunged sharply:

This is not to deny that imports have had some impact on employment in manufacturing. But the primary cause of job loss has been automation. And with AI set to revolutionize manufacturing, employment in manufacturing will continue to decline sharply over the next few decades even if we were to entirely eliminate all imports.

PS. This post does a nice job of explaining why bringing back manufacturing jobs is harder than it looks.

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