The Economic Policy Institute recently published a study estimating how many jobs Walmart has effectively eliminated or displaced as a result of its contribution to the U.S. trade deficit with China . 
 
 The study states that between 2001 and 2013, the inflated deficit eliminated or displaced 3.2 million U.S. jobs. As the world's largest retailer, it seems to follow that U.S.-based Walmart would be a key contributor to the climbing deficit and subsequent job losses. The EPI estimates that the retailer's Chinese imports account for 15.3% of trade deficit growth in that time period. 
 
 The study states that, in total, the U.S. trade deficit resulted in a net job loss of nearly 1 million in 2001; that number rose to over 4 million by 2013. It estimates Walmart alone contributed to over 400,000 job losses over those 12 years, and speculates that about 75% of those were manufacturing jobs which offer better pay and benefits than other affected industries, particularly for workers who lack a college education. 
 
 Walmart announced in 2013 its plans to increase sourcing of U.S.-made products by $50 billion in the following 10 years, the New York Times reports . The EPI's study denounces that program claiming that 100 jobs are displaced by the company for every one job created. 
 
 The EPI utilized information from a 2007 report to construct these estimates and, since the breakdown of a company's imports aren't publicly released, it relied on guesswork. A spokesperson for the company criticized the study: 
 
 We are very proud of our U.S. manufacturing initiative and the results speak for themselves. By investing in products that support American jobs, we are able to bring new products to our shelves while bringing new jobs to local communities in Ohio, Tennessee, California, and many others. Unfortunately, this is an old report with flawed economic analysis that assumed that imports equal job losses and does not take into consideration that countless jobs are added through the global supply chain, distribution and logistics, among other areas of business. 
 
 The EPI is headed by chairman Richard L. Trumka who also serves as the president of AFL-CIO, the largest federation of unions in the U.S. ||||| In the long history of false promises made by trade negotiators, the claim that China’s entry into the World Trade Organization (WTO) in 2001 would reduce the U.S. trade deficit with China and create good U.S. jobs stands out. The total U.S. goods trade deficit with China reached $324.2 billion in 2013. Between 2001 and 2013, this growing deficit eliminated or displaced 3.2 million U.S. jobs (Kimball and Scott 2014). As the world’s largest retailer, U.S.-based Wal-Mart is a key conduit of Chinese imports into the American market. This paper updates earlier work (Scott 2007) to provide a conservative estimate of how many jobs have likely been displaced by Chinese imports entering the country through Wal-Mart: 
 
 Chinese imports entering through Wal-Mart in 2013 likely totaled at least $49.1 billion and the combined effect of imports from and exports to China conducted through Wal-Mart likely accounted for 15.3 percent of the growth of the total U.S. goods trade deficit with China between 2001 and 2013. 
 
 The Wal-Mart-based trade deficit with China alone eliminated or displaced over 400,000 U.S. jobs between 2001 and 2013. 
 
 The manufacturing sector and its workers have been hardest hit by the growth of Wal-Mart’s imports. Wal-Mart’s increased trade deficit with China between 2001 and 2013 eliminated 314,500 manufacturing jobs, 75.7 percent of the jobs lost from Wal-Mart’s trade deficit. These job losses are particularly destructive because jobs in the manufacturing sector pay higher wages and provide better benefits than most other industries, especially for workers with less than a college education. 
 
 Wal-Mart has announced plans to create opportunities for American manufacturing by “investing in American jobs.�? To date, very few actual U.S. jobs have been created by this program, and since 2001, the growing Wal-Mart trade deficit with China has displaced more than 100 U.S. jobs for every actual or promised job created through this program. 
 
 China has achieved its rapidly growing trade surpluses by manipulating its currency: it invests hundreds of billions of dollars per year in U.S. Treasury bills, other government securities, and private foreign assets to bid up the value of the dollar and other currencies and thereby lower the cost of its exports to the United States and other countries. China has also repressed the labor rights of its workers and suppressed their wages, making its products artificially cheap and further subsidizing its exports. Wal-Mart has aided China’s abuse of labor rights and its violations of internationally recognized norms of fair trade by providing a vast and ever-expanding conduit for the distribution of artificially cheap and subsidized Chinese exports to the United States. 
 
 China trade and U.S. job loss 
 
 Exports support jobs in the United States, and imports displace them. Thus, the net effect of trade flows on employment must be based on an analysis of the trade balance. This Briefing Paper calculates the employment effects of growing goods trade deficits by using an input-output model that estimates the direct and indirect labor requirements of producing output in a given domestic industry. The model includes 195 U.S. industries, 77 of which are in the manufacturing sector. 
 
 The model estimates the labor that would be required to produce a given volume of exports, and the labor that is displaced when a given volume of imports is substituted for domestic output. The job losses presented here represent an estimate of what total employment levels would have been in the absence of growing trade deficits. 
 
 U.S. exports to China in 2001 supported 161,400 jobs, but U.S. imports displaced production that would have supported 1,127,700 jobs, as shown in the bottom half of Table 1. Therefore, the $84.1 billion goods trade deficit in 2001 displaced nearly 1 million jobs in that year. Net job displacement rose to 4,123,400 in 2013. Growth in trade deficits with China has reduced demand for goods produced in every region of the United States and has led to job displacement in all 50 states and the District of Columbia. The overall China trade and job loss estimates in this report are based on the findings reported in Kimball and Scott (2014). 
 
 Table 1 Wal-Mart – China goods trade and U.S. job displacement, 2001–2013 2001 2013 Change, 2001–2013 U.S. total Wal-Mart U.S. total Wal-Mart U.S. total Wal-Mart Goods trade with China ($ billions, nominal) U.S. domestic exports* 18.0 0.1 114.0 1.0 96.0 0.9 U.S. imports for consumption 102.1 11.4 438.2 49.1 336.1 37.6 U.S. trade balance -84.1 -11.4 -324.2 -48.1 -240.1 -36.7 Wal-Mart share of U.S. imports 11.2% U.S. trade-related jobs supported and displaced (thousands of jobs) U.S. domestic exports–jobs supported 161.4 0.5 767.5 6.5 606.1 6.1 U.S. imports for consumption–jobs displaced 1,127.7 126.3 4,890.9 547.8 3,763.2 421.5 U.S. trade balance–net jobs displaced 966.3 125.8 4,123.4 541.3 3,157.1 415.4 Wal-Mart share of U.S. Job loss 13.2% *Domestic exports are goods produced in the United States and exclude foreign exports (re-exports), i.e., goods produced in other countries and shipped through the United States. Total exports as reported by the U.S. International Trade Commission include re-exports. Total exports were estimated to be $121.7 billion in 2013, and U.S. re-exports to China represent 6.33 percent of total exports. The employment estimates shown here are based on domestic exports only. See Scott and Kimball (2014), "Methodology" Appendix and endnotes 5 and 6 there for additional details on data sources and models used. This analysis assumes job gains and losses due to Wal-Mart trade are proportional to the shares of trade in each year for domestic exports and imports for consumption. Source: Author's analysis of U.S. Census Bureau (2013), U.S. International Trade Commission (USITC 2014), Bureau of Labor Statistics (BLS 2014), BLS-EP 2014a, BLS-EP 2014b, and Scott and Kimball (2014). Share on Facebook Tweet this chart Embed Copy the code below to embed this chart on your website. Download image 
 
 Wal-Mart’s role 
 
 Given its enormous size and the fact that it sells manufactured goods, which have been the primary Chinese export to the U.S. in recent years, it is natural to try to estimate the role of Wal-Mart as a conduit for Chinese trade. We find that a conservative estimate is that Wal-Mart accounted for approximately 11.2 percent of total U.S. goods imports from China between 2001 and 2013. This estimate is based on published reports on Wal-Mart trade with China between 2001 and 2004, including Wal-Mart’s own estimates of its imports from China, on more recent published data on ocean trade (by company), and on the relationship between total Wal-Mart sales in the United States and personal consumption expenditures on goods from the GDP accounts (BEA 2015). 
 
 Wal-Mart provided its own estimate for the value of imports from China in its fiscal year ending January 31, 2004 (Wal-Mart 2007). Most of these goods were imported in 2003, and the Wal-Mart share of total imports from China in that year was 11.9 percent. Bianco and Zellner (2003) and Bianco (2006) have also attempted to construct estimates of Wal-Mart’s imports from China and have reported imports that yield shares that are similar to Wal-Mart’s own estimates, with the lowest share reported as 11.2 percent in 2004. Since 2007, evidence strongly suggests that this share has not shrunk (and may have risen). For example, The Journal of Commerce produces annual reports of total U.S. imports and exports of goods via ocean container transport. While this is a partial and incomplete accounting, it does show that Wal-Mart was the top U.S. importer of ocean container freight in every year between 2001 and 2013, and its share of top 100 imports remained stable in a range from 12.1 percent to 14.8 percent of total imports of the top 100 importers. 
 
 Limited data on total imports by company are also available from shipments data collected by the U.S. Customs and Border Protection agency. Data on Wal-Mart imports are available for only two comparable months in the study period: November 2007 and 2012. The available information reports total imports in both kilograms and container equivalents (twenty-foot equivalent units or TEUs). The Wal-Mart share of total imports from China increased in both kilograms and TEUs in this period (Panjiva.com 2015). In short, the 2003 share of imports accounted for by Wal-Mart as estimated by the company itself (11.2 percent) has likely only grown since then. However, for this report we make the conservative assumption that it has remained stable. 
 
 But a stable share of Wal-Mart imports implies rapid growth in volumes. U.S. goods imports from China increased $336.1 billion between 2001 and 2013, as shown in the top half of Table 1, an increase of 329 percent. If Wal-Mart’s share of U.S. imports from China remained stable in this period at 11.2 percent, this implies that its imports increased from $11.4 billion in 2001 to $49.1 billion in 2013, an increase of $37.6 billion. As it is a retailer and not a manufacturer, Wal-Mart likely exports only a negligible amount to China. Our best estimate is that Wal-Mart accounts (at most) for roughly 1.0 percent of total U.S. exports to China. This in turn implies that Wal-Mart was responsible for a $36.7 billion increase in the U.S. trade deficit with China between 2001 and 2013. 
 
 The Wal-Mart trade deficit displaced 125,800 jobs in 2001 and 541,300 jobs in 2013. Thus, Wal-Mart was responsible for displacing at least an additional 415,400 U.S. jobs between 2001 and 2013, as shown in the bottom half of Table 1 and in Figure A. While Wal-Mart was responsible for 11.2 percent of U.S. imports in this period, it was responsible for 13.2 percent of the U.S. job losses due to growing trade deficits with China (Table 1). Since Wal-Mart’s exports to China were negligible, the rapid growth of its imports had a proportionately bigger impact on the U.S. trade deficit and job losses than overall U.S. trade flows with China (since the rest of U.S. trade with China does include significant U.S. exports to that country). On average, each of the 4,835 stores Wal-Mart operated in the United States in fiscal 2014 (Wal-Mart Stores Inc. 2014) was responsible for the loss of about 86 U.S. jobs due to the growth of Wal-Mart’s trade deficit with China between 2001 and 2013. 
 
 Figure A Wal-Mart share of jobs lost due to growth of U.S. goods trade deficit with China, 2001–2013 Category Jobs Other U.S. trade 2,741,700 Wal-Mart 415,400 Chart Data Download data The data below can be saved or copied directly into Excel. The data underlying the figure. Source: Author's analysis of U.S. Census Bureau (2013), U.S. International Trade Commission (USITC 2014), Bureau of Labor Statistics (BLS 2014), BLS Employment Projections program (BLS-EP 2014a and 2014b), and Scott and Kimball (2014). Share on Facebook Tweet this chart Embed Copy the code below to embed this chart on your website. Download image 
 
 These job loss estimates are conservative because goods sold at Wal-Mart are primarily durable and nondurable consumer goods, such as furniture, apparel and textiles, toys, and sporting goods. These are particularly labor-intensive manufacturing industries and support more jobs per $1 billion of imports than more capital-intensive goods such as machine tools, motor vehicles and parts, and aircraft and parts imported by other U.S. firms. 
 
 Job losses in manufacturing account for 75.7 percent of total jobs displaced due to the growing U.S. trade deficit with China in this period (Kimball and Scott 2014, Table 3). Jobs in the manufacturing sector pay higher wages and provide better benefits than most other industries, especially for workers with less than a college education. Manufacturing also employs a greater share of such workers than other sectors (Scott 2013). 
 
 The job displacement estimates in this study are conservative. They include only the jobs directly or indirectly displaced by trade, and exclude jobs in domestic wholesale and retail trade or advertising; they also exclude re-spending employment. They also do not account for the fact that during the Great Recession of 2007–2009, and continuing through 2013, jobs displaced by China trade reduced wages and spending, which led to further job losses. 
 
 Further, the labor-market effects of the U.S. trade deficit with China are not limited to job loss and displacement and the associated direct wage losses. Competition with low-wage workers from less-developed countries such as China has driven down wages for workers in U.S. manufacturing and reduced the wages and bargaining power of similar, non-college-educated workers throughout the economy, as previous EPI research has shown (Bivens 2013). The affected population includes essentially all workers with less than a four-year college degree—such workers make up roughly 70 percent of the workforce, or about 100 million workers (U.S. Census Bureau 2015). 
 
 The workers affected by this job displacement include millions whose jobs were not lost but whose wages were held down because of increased labor market competition with the job losers. As earlier EPI research has shown, trade with China between 2001 and 2011 displaced 2.7 million workers, who suffered a direct loss of $37.0 billion in reduced wages alone when re-employed in non-traded industries in 2011 (Scott 2013). In addition, the nation’s 100 million non-college educated workers suffered a total loss of roughly $180 billion due to increased trade with low-wage countries. These indirect wage losses were nearly five times greater than the direct losses suffered by workers displaced by China trade, and the pool of affected workers was nearly 40 times larger (100 million non-college-educated workers versus 2.7 million displaced workers). 
 
 Wal-Mart’s U.S. manufacturing promises 
 
 In 2013 Wal-Mart announced a plan to purchase “$250 billion in products that support the creation of American jobs�? by 2023 by increasing purchases of U.S. manufactured goods (Loeb 2013, Wal-Mart 2015a). To date, very few actual U.S. manufacturing jobs have been created as a result of this commitment. Wal-Mart remains, by far, the top importer of ocean shipping containers in the United States with total imports of more than 775,000 container-equivalents (TEUs) in 2014, exceeding total imports by Target, the number two importer, by more than 250,000 TEUs (48.7 percent, more than total Target imports) (Journal of Commerce 2015). In addition, about two-thirds of what Wal-Mart calls American-made goods are actually groceries, which support few U.S. manufacturing jobs (Alliance for American Manufacturing 2015). 
 
 In 2015, Wal-Mart’s publicly available list of manufacturing jobs that have been or will be created in the United States includes fewer than 4,100 specific U.S. manufacturing jobs, and many of those are promised jobs that firms “will create�? up to 10 years in the future (Wal-Mart 2015c). Since 2001, Wal-Mart’s growing trade deficit with China has displaced more than 100 U.S. jobs for every job that Wal-Mart has created in the United States through its “Invest in American Jobs�? program.�? Meanwhile, the U.S. goods trade deficit with China increased by $23.9 billion (7.5 percent) in 2014 (Scott 2015). Continuing growth in that trade deficit and in Wal-Mart imports will likely displace many times more manufacturing jobs than Wal-Mart creates in the United States over the next decade. 
 
 Conclusion 
 
 The growing goods trade deficit with China displaced 3.2 million U.S. jobs in the United States between 2001 and 2013, and it has been a prime contributor to the crisis in manufacturing employment over the past 15 years. Due to its own growing trade deficit with China, Wal-Mart alone was responsible for the loss of more than 400,000 U.S. jobs, 13.2 percent of total U.S. jobs lost in this period. The current unbalanced U.S.-China trade relationship is bad for both countries, and Wal-Mart has played a major role in creating that imbalance. The United States is piling up foreign debt, losing export capacity, and facing a more fragile macroeconomic environment. 
 
 Meanwhile, China has become dependent on the U.S. consumer market for employment generation, has suppressed the purchasing power of its own middle class with a weak currency, and, most importantly, has purchased trillions of dollars of hard-currency reserves in low-yielding, government securities and other financial assets, instead of investing these funds in public goods that could benefit Chinese consumers and workers. In order to artificially and illegally hold down the value of its currency, and thereby lower the cost of its exports to the United States and other countries, China has purchased nearly $5 trillion in U.S. Treasury bills and other government securities and private assets (IMF 2015, SWFI 2015) since it entered the WTO in 2001. It has also repressed the labor rights and wages of its workers, making its exports artificially cheap, further subsidizing its exports. Wal-Mart has aided China’s abuse of labor rights and its violations of internationally recognized norms of fair trade behavior by providing a vast and growing conduit for the distribution of artificially cheap and subsidized Chinese exports to the United States. 
 
 The U.S. relationship with China needs fundamental change: addressing the exchange rate policies and labor standards issues in the Chinese economy should be important national priorities. Wal-Mart’s huge reliance on Chinese imports illustrates that many powerful economic actors in the United States benefit from China’s unfair trading system. Wal-Mart’s gain, however, is not the country’s gain, as Wal-Mart’s imports have contributed to the ever-growing trade deficit that imperils future economic growth. 
 
 —The author thanks Josh Bivens and Ross Eisenbrey for comments; Elizabeth Glass for research assistance; and Molly McGrath, Kevin Rudiger, and Aditya Pande for data analysis. 
 
 About the author 
 
 Robert E. Scott is director of trade and manufacturing policy research at the Economic Policy Institute. He joined EPI as an international economist in 1996. Before that, he was an assistant professor with the College of Business and Management of the University of Maryland at College Park. His areas of research include international economics and trade agreements and their impacts on working people in the United States and other countries, the economic impacts of foreign investment, and the macroeconomic effects of trade and capital flows. He has a Ph.D. in economics from the University of California-Berkeley. 
 
 Endnotes 
 
 See Kimball and Scott (2014, 6 and “Appendix: Methodology,�? 25–27) for further details. 
 
 This report distinguishes exports produced domestically and re-exports—which are goods produced in other countries, imported into the United States, and then re-exported to other countries, in this case to China. Re-exports do not support domestic employment because they are not produced domestically and they are excluded from the model used here. See Table 1 for information about the levels of U.S. re-exports to China in this period. 
 
 This model assumes that everything else is held constant; the trade and job loss estimates shown here are based on counterfactual simulations. 
 
 The complete list of Journal of Commerce citations for 2004–2015, covering calendar year trade between 2003 and 2014, is available on request. 
 
 Wal-Mart (2007) reports that it “estimates about $18 billion worth of products were purchased from China [in the fiscal year ending 2004] … about $9 billion imported from direct sources and about $9 billion from indirect.�? These data are for Wal-Mart’s fiscal year ending on January 31, 2004, and were 11.9 percent of U.S. consumption imports from China in 2003, when most of those goods were imported. The following estimates all assume that Chinese imports are for Wal-Mart fiscal years (FY), and are compared with total U.S. imports in the preceding calendar years. Bianco and Zellner (2003) report that Wal-Mart imports from China totaled $12 billion (11.8 percent of U.S.-China imports) in FY 2002. Bianco (2006) reports that Wal-Mart imports from China were $22 billion in FY2005 (11.2 percent of China imports). Bianco’s estimates for FY 2004 replicate the estimate provided by Wal-Mart (2007) for its FY2004 imports from China. Based on these estimates, Table 1 assumes, conservatively, that Wal-Mart maintained a stable 11.2 percent share of U.S. goods imports from China between 2001 and 2013. 
 
 Between 2003 and 2013, overall Wal-Mart net sales in the United States rose from $208.8 billion to $336.6 billion (Wal-Mart Stores Inc. various years), rising from 7.7 percent of total U.S. personal consumption expenditures on goods in 2003 to 8.8 percent in 2013 (BEA 2015). Thus, Wal-Mart was a major and growing channel for the distribution of both domestic and imported goods in the United States in this period. Wal-Mart was also the single largest U.S. importer of goods imported from all countries via ocean container freight in 2014 (Journal of Commerce 2015), and was responsible for 12.1 percent of the total containers imported by the top 100 companies in that year. These data suggest that Wal-Mart’s share of total China imports likely increased between 2003 and 2013. Thus, the estimate of jobs displaced by Wal-Mart’s China trade in Table 1 likely represent a lower-bound estimate of actual jobs displaced. 
 
 Under U.S. rules, companies are allowed to petition Customs and Border Protection (CBP) to avoid disclosure of company names on bills of lading that accompany each shipment. Periodically, gaps appear in these disclosure petitions, making importing companies known for short periods of time. Comparable Wal-Mart data are available only for November 2007 and 2012 from this database. 
 
 This calculation is based on the ratio of total Wal-Mart international sales per square foot times an estimate of total Wal-Mart square footage in China, in various Wal-Mart fiscal years (Wal-Mart Stores Inc. 2002, 2006, 2014). Wal-Mart reports state that “over 95 percent of the merchandise in our stores in China is sourced locally�? (Wal-Mart 2015b). Export estimates in this paper assume that sales per store in China were equal to the average per square foot for all Wal-Mart international stores times estimated total Wal-Mart square footage in China, and that all Wal-Mart imports into China came from the United States (the average Wal-Mart store in China was 2.3 to 2.8 times larger than the average Wal-Mart international store, based on data reported by Wal-Mart Stores Inc. (various years)). This is clearly an upper bound on total Wal-Mart exports to China because it assumes that all Wal-Mart imports into China originated in the United States, which is highly unlikely. 
 
 Wal-Mart had 6,107 international stores at the end of FY2014 and total international sales of $136.5 billion in 2014, or about $22.3 million per store. Wal-Mart had 405 stores in China, with estimated total sales of $25.6 billion in FY2014, and total imports of $1.0 billion (reported as U.S. exports in 2013 in Table 1). Assuming that all these imports were shipped from the United States, Wal-Mart was responsible for 0.9 percent of total U.S. exports to China in 2013. 
 
 These estimates assume that jobs supported and displaced by Wal-Mart’s China trade were directly proportional to total jobs supported and displaced by total U.S. exports to and imports from China in 2001 and 2013, as estimated by Kimball and Scott (2014). 
 
 Direct jobs displaced refer to jobs displaced within a given industry, such as motor vehicles and parts. Indirect jobs displaced are those displaced in industries that supply inputs to that industry, such as primary metal (e.g., steel), plastics and rubber products (e.g., tires and hoses), transportation, and information. Re-spending employment results from the spending of wages by employed workers. It is one form of a macroeconomic multiplier. 
 
 Author’s calculations from the estimated $1,800 wages lost by a median-wage non-college educated worker per year (Bivens 2013) times the 68.1 percent of the workforce made up of workers with less than a four-year college degree (U.S. Census Bureau 2015) times total number of U.S. workers employed (on average) in 2014 from the Bureau of Labor Statistics (BLS 2015) (yielding roughly 100 million non-college educated workers). 
 
 The initial Wal-Mart commitment was to purchase $50 billion in “U.S. products,�? a figure that was subsequently increased to $250 billion (Loeb 2013, Walmart 2015a). 
 
 References 
 
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 Wal-Mart Stores Inc. 2015c. “Walmart U.S. Manufacturing Announcements.�? ||||| “I’m a free trader,” said Donald Trump, in his speech announcing his candidacy. That was in June 2015. Since then, he’s been singing a very different tune. Sounding more like a flannel-wearing protester than the ruthless tycoon of The Apprentice, Trump now says the US needs ”fair trade, not free trade.” The fact that America imports nearly $800 billion more in goods than it exports is a “politician-made disaster,” he said in a big speech on trade in June 2016, adding, “It is the consequence of a leadership class that worships globalism over Americanism.” 
 
 This isn’t exactly original. Bernie Sanders made it a theme of his campaign too, and there have been Trumps of yesteryear—Pat Buchanan and Ross Perot in the 1990s, for instance. Look further back in history and you’ll find plenty more. But Trump is the first free trade-bashing populist to win the White House. His protectionist rhetoric fired an insurgence of blue-collar voters in Pennsylvania, Wisconsin, and Michigan, states long counted as Democrat strongholds. Anti-trade resentment has clearly been seething among vastly more Americans than it did 20 years ago. 
 
 And here’s the thing. Trump’s supporters are right to distrust the pro-free trade fanaticism of America’s political mainstream. Starting with Ronald Reagan, one after another, American presidents of both parties have oversimplified and overemphasized the benefits of free trade, without pausing to study its costs, and who was paying them—or even how exactly free trade is supposed to grow the US economy in the first place. The intellectual and political leadership didn’t see the lasting damage of their knee-jerk free trade zealotry for the same reason that they didn’t see the moment of political payback approaching: because they didn’t think to look for it. 
 
 That lapse has now invited a populist demagogue into the White House, promising that tariffs and tough new deals will bring back low-skilled manufacturing jobs. Trump has correctly identified a problem. But by focusing only on free trade deals he risks repeating the very mistakes that conjured him forth in the first place. 
 
 The origins of our free trade obsession 
 
 Wikimedia Commons Portrait of David Ricardo by Thomas Phillips, circa 1821. 
 
 Let’s, for a moment, forget the world of fake tans and power ties, and go back to an era of neckcloths and breeches, and the birth of our present-day obsession with free trade. 
 
 The godfather of free trade, David Ricardo, was a cool guy. A Sephardic Jew of Portuguese descent born in the Netherlands, he was the third of 17 children. He learned markets from his father, a stockbroker, for whom he began apprenticing when he was just 14. In his early 20s, he eloped with a Quaker woman, and converted to Unitarianism, prompting his parents to disown him. Ricardo struck out on his own, building a successful bond trading business. 
 
 He was in his mid-30s in 1815 when Napoleon staged a dramatic return from exile, and gave a second try at dominating Europe. On June 18, an alliance of British, Belgian, Dutch, and German soldiers squared off against Napoleon at the Battle of Waterloo, in present-day Belgium. Ricardo dispatched an observer to watch the battle from a distance. Once the winner became clear, the observer rode to a nearby packet ship en route to London to share the news. Ricardo promptly sold off his British Treasury bonds (after informing the British government). Other traders assumed the French had won and dumped their Treasuries too. Ricardo then swept up British bonds for cheap—a coup of market manipulation that turned Ricardo enormous profits. 
 
 Ricardo retired from trading shortly thereafter, turning instead to a career in British politics. He also dabbled in economic theory—a pastime he picked up after devouring a copy of Adam Smith’s The Wealth of Nations while holidaying in Bath in 1799. In time, Ricardo pioneered some of the foundational concepts of classical economics. Of all of these, comparative advantage is the most deeply revered. (In fact, Nobel laureate economist Paul Samuelson once declared it the only theory in economics that is both true and non-trivial.) 
 
 Its origins riff off of Smith’s principle of division of labor, which in the global trade context, is commonly known as “absolute advantage.” Smith’s idea states that for economies to make the most of their limited number of workers, they should specialize in making whatever they can produce most efficiently, trading any surplus production for other goods they need. 
 
 Paul Samuelson once declared comparative advantage the only theory in economics that is both true and non-trivial. 
 
 The “comparative” part—which Ricardo pioneered in 1817—adds to Smith’s idea a counterintuitive twist. Instead of focusing on whatever goods it makes more efficiently than other countries, a trading nation should specialize in making the thing for which it has the lowest opportunity cost. In other words, it should reject making products that offer it less gain than the product it does choose, even if it’s the most efficient manufacturer of both. 
 
 Here’s how it works. Imagine a world with two countries—let’s say Portugal and England—and two commodities, wine and cloth. If Portugal’s workers focus entirely on wine, they can produce 200 barrels in a week; if they make only cloth, they’ll manufacture 600 bolts. England’s labor force, meanwhile, can make a maximum of 50 barrels of wine per week, or 500 bolts of cloth. If both countries split their workforces between making both commodities, and declined to trade, they would have a combined output of 675 units (125 barrels of wine and 550 bolts of cloth). 
 
 Clearly, Portugal has the absolute advantage in both cloth and wine. However, Portugal has a lower opportunity cost in making wine: It must sacrifice only three bolts of cloth to make a single barrel of wine, compared with England’s opportunity cost of 10 bolts. If the two countries trade, Portuguese winemakers will soon realize that English clothmakers will give them more cloth for each of their barrels than they can get at home, and vice-versa. Portugal’s comparative advantage then, is in winemaking, while England’s is cloth. By specializing, their combined output—700 units (200 barrels of wine and 500 bolts of cloth)—is greater than if each country stuck to making both commodities and not trading. 
 
 This is the magic of comparative advantage. Even though England was less efficient than Portugal at producing both wine and cloth, the surplus generated by specializing and trading makes both countries better off. It guarantees that free trade “lifts all boats.” This typically means each can benefit from imports that are of higher quality, greater variety, and are relatively cheaper, and from increased consumption of their exports. International free trade theory ultimately rests on this Ricardian bedrock: Free trade is a win-win, and not a zero-sum, proposition. It’s a seductive idea. 
 
 What Ricardo missed… 
 
 The dynamic Ricardo posited is powerful because these forces do usually work the way he describes. It explains why production of labor-intensive products like toys shifted from countries where labor is relatively scarce, like the US, to those teeming with workers, most obviously China. For countries like the US, having workers toil making low-value toys is a huge opportunity cost when they could be employed in high-margin industries, like medical device manufacturing, that involve heaps of investment—since a relative abundance of capital is the US’s comparative advantage. 
 
 But that’s only part of the picture. Sometimes free trade isn’t a win-win at all. When a business shuts down due to its country’s loss of comparative advantage in that industry, people lose their jobs. Finding work in an entirely different sector is seldom as peachy as Ricardo’s model makes it seem. 
 
 This is a big reason why “comparative advantage doesn’t benefit everyone or even most people,” says Dean Baker, founder of the Center for Economic Policy research and author of Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. In fact, says Baker, “the majority of people are losers.” 
 
 “You can’t take a spinning jenny and wave a Harry Potter wand over it and get a wine press out of it. It’s simply nonsense.” 
 
 In a way, the same goes for the factories that are now no longer needed. Countries that have invested in physical plant to manufacture one thing will seldom be able to use it to make something else, notes Steve Keen, economics professor at Kingston University London, and author of Debunking Economics. 
 
 “What Ricardo imagined was you could easily move the capital from one country to another, and you simply can’t do it,” Keen says. “You can’t take a spinning jenny and wave a Harry Potter wand over it and get a wine press out of it. It’s simply nonsense.” 
 
 Ricardo’s defining economic principle has another limitation that’s overlooked by proponents of free trade, who so often talk about it prescriptively, as though it were a recipe for growth. Comparative advantage offers a great description of how the market will shift around countries’ finite resources as they respond to the cheapening of production abroad. But, says Keen, it tells us very little about what economies must do to keep growing. And as Baker points out, next to nothing about how to actually improve people’s living standards. 
 
 What then, beyond Ricardian market forces, creates prosperous, dynamic economies? One place to look for clues is in America’s own history textbooks: the stupendous surge in productivity that powered the postwar American economic miracle for three decades. 
 
 America’s recipe for prosperity 
 
 Flickr user Joe Hauptman (licensed under (CC BY-SA 2.0)) A 1957 Ford ad in Life Magazine. 
 
 This golden age of US growth is what Trump harkens back to in his “Make America Great Again” slogan—and the era was indeed great. Each generation could be confident that their children would be better off than they were. US workers with only a high school education could expect to move their families to the suburbs, fill their homes with shiny new appliances, and their garages with one—or maybe even two—cars. Factory workers lived alongside accountants. 
 
 The era between 1945 and 1975 is what economists Claudia Goldin and Robert Margo have termed the Great Compression (pdf). During this time, incomes of the best-paid American workers grew at a slower pace than those of middle- and lower-income households, creating rare equality among different socioeconomic classes. 
 
 Ironically, these halcyon days have their roots in two darker events, The Great Depression and World War II, as economist Robert Gordon explains in The Rise and Fall of American Growth. Despite the devastation the Great Depression wreaked on the US economy, it led to New Deal reforms that encouraged unions, boosting real wages at the same time as it shrank working hours. Xenophobic policies typified by the Chinese Exclusion Act kept out immigrants, making low-skilled native workers more valuable. A protectionist trans-Atlantic trade war that broke out in 1930 helped seal off the US to trade until after the war ended. 
 
 In other words, the blossoming of America’s middle class happened in a period in which Ricardian free trade applied hardly at all. 
 
 US growth during this era was also buoyed by astonishing increases in productivity. Some of it was thanks to firms’ spending on efficiency-boosting equipment; investment leapt between the years of 1937 to 1941. However, it was also due to the US government’s support of industry. When the war hit, the US government invested heavily in things like aeronautics. The sum of the new capital equipment it installed during the war was worth about half of the private-sector capital stock that existed before the war, according to Gordon. 
 
 Even after the war, the US continued its heavy investment in military technology, which kept on boosting US productivity. In fact, its emphasis on military-related spending led to the creation of computers and, eventually, the internet. 
 
 America’s growth engine 
 
 AP Pennsylvania Congressman William Scranton shakes the hand of a steelworker at the Jessop Steel Co. plant Washington, PA, in 1962. 
 
 The conditions that made so much of this growth possible were based on the theories of another foundational economist, John Maynard Keynes, that government policy should focus on full employment—keeping everyone employed. When times are good and business is booming, the government should collect a surplus of taxes so that when the inevitable downturns hit, it could shelter workers from the brutalities of the business cycle, running a deficit to boost jobs during private-sector retrenchment. The government should also use tax policy and regulation to keep the interests of workers and business owners aligned, and to try to keep either from having more power than the other. 
 
 Why would the government do this? The Keynes-based policies of the postwar era were designed with the understanding that workers were also consumers—a fundamental engine of demand. Making sure they had enough money in their pockets to buy goods kept the economy chugging along. (This is a different approach to growth from Ricardo’s model, which focuses on boosting the supply of goods and services, with little thought about who will buy them.) The fact that the economy in those post-war years was almost exclusively driven by domestic demand made it much easier to align the fortunes of companies with those of their workers. Even as real wages crept higher, encouraging companies to invest in automation, those that lost their jobs had a strong social safety net that let them keep consuming as they looked for new work, encouraging businesses to keep investing. And robust growth thanks to fabulous productivity gains made jobs plentiful. 
 
 So what became of trade between nations during those years? Did trade simply fade from the economic picture? In some sense, yes. From 1950 to the mid-70s, exports and imports each hovered around 5% of America’s GDP. These days each equals closer to 15%. 
 
 But though it had little role in driving the rapid improvements in American living standards, trade was still very much part of the mix, as we shall see. 
 
 America on top—for a while 
 
 AP/Nobuyuki Masaki The Matsushita Electric Appliances Company Totsuka factory in 1965, when refrigerator manufacturing was one of Japan’s hottest industries. 
 
 After World War II had laid waste to Europe and Asia, the US emerged as the world’s lone economic power. To help rebuild its Cold War allies’ economies—and reward countries for opposing communism—the US government led what was known as “redistributive” trade policies, slashing tariffs and opening its vast consumer market to their exports, while allowing them to protect their own infant industries. US companies exited the markets for everything from shoes and TV sets to steel. In other words, this free-trade diplomacy wasn’t free at all. 
 
 In fact, the countries that industrialized during this time—Japan, Korea, and Germany, for instance—built up the scale, technology, and quality that lets them dominate manufacturing sectors like automaking and shipbuilding to this day. 
 
 By the 1970s, a new American economic orthodoxy took hold. That’s when the double-whammy of inflation and unemployment prompted US policymakers to begin rejecting Keynes’ ideas in favor of the philosophies of Milton Friedman and other economists. Starting with Reagan in the early 1980s, a rigid allegiance to the belief that markets alone promote efficiency—and therefore boost prosperity—led US policymakers to chisel away at the institutions that had long kept unemployment down and income fairly evenly distributed. Ricardo’s generally useful, if narrowly applicable, model was a crucial pillar of this larger ideology. 
 
 By the time Clinton became president, America’s free-trade crusade—backed by the IMF—broadened beyond simply slashing trade barriers, into clearing the path for foreign investment. Though it bore scanty resemblance to the simple model that Ricardo sketched out, its prophets—a.k.a. Davos Man, free-marketeers, the Washington Consensus—still touted free trade deals as benefiting all. When Trump blames US leaders for favoring “globalism” over “Americanism,” it’s this world order he is condemning. The North American Free Trade Agreement (Nafta) is its watershed. 
 
 Nafta and the free trade bait-and-switch 
 
 Reuters/Win McNamee President Bill Clinton enthusing about Nafta in 1993. 
 
 “Nafta is the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country,” Trump has said repeatedly throughout his campaign. 
 
 The thing is, Nafta—the trade pact signed in 1994 between the US, Canada and Mexico—wasn’t really that concerned with trade at all. 
 
 Conceived by Reagan, Nafta was sold to the public as the creation of a unified market of 360 million consumers. Increased demand from Mexico was projected to create an additional 170,000 US jobs, and as Mexican demand for US exports picked up, create a trade surplus of between $7 billion and $ 9 billion. Long-term growth in Mexican incomes was supposed to ease illegal immigration to the US. 
 
 By the late 1980s and early 1990s, however, when Nafta was being drawn up first by George H.W. Bush, then by Bill Clinton—the Keynesian presumption that workers are also consumers had long since been jettisoned. Tellingly, the most crucial focus of its many thousands of pages was on installing legal protections that encouraged and protected American corporate investment (which for Mexico marked a departure from its 1980s policies more focused on nurturing local industry and human capital). 
 
 Nafta—and many free trade agreements that followed it—opened up Mexico to corporate capital, while enshrining weak labor protections and environmental standards. By facilitating “race-to-the-bottom” offshoring, it did little to boost the skills base or purchasing power of Mexico’s consumer class. 
 
 In at least one sense, however, Nafta worked: Investment gushed into Mexico. 
 
 But as US corporate capital flowed south, American factories shuttered—and those jobs weren’t replaced for a long time, if ever. In 1993, the US-Mexico trade balance came in at $1.7 billion. The balance soon swung negative, where it remains; last year, its deficit exceeded $60 billion. 
 
 US policymakers and economists shouldn’t have been so befuddled about Nafta’s effects. Ricardo’s comparative advantage worked exactly as it should within the parameters agreed to in Nafta. 
 
 Why then did Nafta not encourage Mexican consumption of US goods? One huge rationale of the trade deal was that consumption would rise relatively quickly as Mexico’s middle class families’ incomes gradually caught up with those of their northern neighbor’s. However, Mexico isn’t keeping up. Real per-capita GDP has risen 24% since 1993, according to the World Bank; the US’s has climbed 39% over the same period. Meanwhile, Mexico’s poverty rate remains almost unchanged since 1994. Its economy’s comparative advantage—its reliance on low-skilled labor—made it hard for Mexico to raise living standards, which would have spurred its consumption of US goods and investment in efficiency-increasing technologies. Meanwhile, inflows of cheap US corn left millions of Mexican agricultural workers jobless, helping push many to migrate to the US—often illegally—in search of work. 
 
 Though you’ll often hear people say that Nafta let Mexicans steal American jobs, this rhetoric distracts from a far more fundamental dynamic of trade—that workers in all countries benefit from rules that prevent corporations from exploiting them. Without these, companies have little incentive to invest in their workers and boost their technology, spurring growth for everyone. And while those focusing on the benefits of Ricardian free-trade praise the “efficiencies” gained from keeping labor cheap, they ignore that most of this investment didn’t actually boost productivity and living standards all that much. 
 
 This self-defeating policy wasn’t necessary. For instance, a few years later, the US signed a textiles trade deal with Cambodia that specified worker rights and protections linking improved labor standards with increased quotas. The agreement boosted compliance with labor protections without hurting exports or job growth (pdf, p. 15). In other words, the agreement tilted the balance of power between capital and labor slightly less in favor of corporations—the opposite of what Nafta achieved. 
 
 Despite its many flaws, Nafta set the stage for the US-led multilateral trade pacts that followed. In addition to opening up developing nations to the fickle flows of global capital, US negotiators demanded excessively lengthy patent, licensing, and copyright protections that enriched corporate giants in pharmaceuticals, entertainment, and information technology, says CEPR’s Baker—at the expense of both American consumers and its trading partners’ industries. And despite the careful attention to those details, American leaders consistently avoided confronting a problem that, not long after Nafta, began warping the US economy into the unstable mess that brought Trump to power. 
 
 Along came China 
 
 Reuters Chinese workers from the Capital Steel Plant hold their helmets aloft as they perform in front of the Forbidden City in 1999. 
 
 Trump’s biggest trade bugbear of all is China, mostly because its leaders ”cheat” by manipulating its currency—a sin he threatens to punish with a 45% tariff on certain Chinese goods. 
 
 “Currency manipulation” sounds kind of dastardly—and, indeed, it can be. In fact, it’s one of the main factors responsible for creating imbalances of trade and capital flow among countries that show up, for example, on the other side of the ledger of the US’s chronic and ever-deepening trade deficit. 
 
 Running a trade deficit isn’t necessarily bad—provided a country is doing so for the right reasons. Under standard trade theory, says CEPR’s Baker, foreign investment should flow into poorer countries. By definition, bringing in more capital than you’re sending out to the rest of the world entails importing more goods than you export. And for a developing country, this makes sense; foreign investors are getting higher returns on growth, and as the developing country builds up its manufacturing base, it has to buy everything from abroad that it doesn’t yet have the ability to make. 
 
 But that’s not what’s been going on in the global economy for the last 15 or 20 years. Take a look at China. When the Middle Kingdom began building up its industrial base, throughout the 1990s and 2000s, it was doing the exact opposite: sending more capital abroad—to the US, mainly—than was coming into China, and exporting more than it imported. 
 
 Just as Trump has said, China did this in no small part by manipulating its currency, the yuan. China—along with 20 or so other surplus-running countries—kept its currencies cheaper than market prices, which made its exports extra-competitive and US exports relatively pricier everywhere. 
 
 Since it let China sell more goods abroad than it otherwise would, currency manipulation artificially boosts China’s employment—and, as a result, hurt US employment. A recent paper (pdf) by economist David Autor and colleagues estimated that this contributed to the loss of 2.4 million American jobs between 1999 and 2011. According to the Economic Policy Institute, a left-leaning think tank, the China-made goods the US imported through Walmart alone displaced or eliminated some 400,000 jobs between 2001 and 2013. 
 
 But there was a cost to China, too. Chinese consumers and businesses lose purchasing power since imported goods cost more. And these days, that’s the biggest concern—not just for China, but also for the entire global economy. After decades of currency manipulation and other policies that overtaxed Chinese consumers, the country is struggling to revive consumption as an engine of growth. 
 
 The strange case of the missing global middle class 
 
 But if other countries have ”stolen” American jobs, why aren’t their workers spending more buying Made in the USA? The upshot of deepening integration of global markets seems to be that workers everywhere are seeing less of the fruits of their labor. As their incomes rise at a slower pace than their economy grows, households keep spending less than everyone expects. 
 
 Our out-of-whack global system is responsible for another of our era’s big oddities: The fact that Americans can keep buying so much stuff, even as their jobs are disappearing and wages are stagnating. That can also be explained by currency manipulation. When other countries undervalue their currencies by buying dollars, they force America to borrow. In other words, surplus countries essentially loan Americans money to buy their exports. 
 
 That might sound nice for the US, but it isn’t. Since America is already flush with capital, that easy money doesn’t flow into productive investments; it blows up bubbles in stock and housing markets. In the late 1990s and mid-2000s, first tech investors and then home owners took on the debt. Since the bursting of the 2007 housing bubble, the US government has shouldered the borrowing burden instead. 
 
 The Age of Inequality 
 
 Reuters/Brian Snyder A U.S. flag is stuck in the broken window of a building on the grounds of the now-closed Bethlehem Steel mill in Bethlehem, Pennsylvania. 
 
 “Free trade” has been a nifty symbol of American economic fortunes throughout the ages—a tool of Cold War diplomacy, part of the market-fundamentalist mania of the 1980s, a Trojan Horse for globalized finance in the 1990s. Nowadays, it’s a source of inequality. 
 
 The hallmark of the Great Compression, the golden age of American growth, was equality in income. At work, the interests of bosses and employees aligned because, in that era where Keynesian logic prevailed, paying workers well enough that they could keep consuming fueled America’s booming growth. The notion seems alien these days, when the top 10% of American earners bring in almost nine times as much income as the bottom 90%, on average. 
 
 Trump blames greedy multinational companies like Ford and Carrier for deviously exploiting free trade, shipping good American jobs to Mexico and China and undercutting American wages. Is free trade to blame? 
 
 In Ricardo’s model, every country is relatively more efficient at something; one country’s shift to making wine frees up its trading partner to focus on cloth. So even as Americans lost jobs to Mexico and Asia, the free market should soon create better-paying work in the US’s comparative advantage sectors. This explains why globalization has been kind to those with the college degrees needed to thrive in America’s new industries. Just as the Ricardian model predicted, the US labor force shifted toward higher-productivity services—computing, telecommunications, and other high-tech industries. Throughout the 1980s and 1990s, the share of workers going on to college stagnated, heating up demand for their relatively scarce skills. Unlike much of manufacturing, many of these higher-paying services jobs were sheltered from immigrant competition by either visa restrictions or licensing requirements, driving wages higher still, says CEPR’s Baker. 
 
 What about the rest of America’s workers, though? As prophesied, productivity has indeed continued to surge in manufacturing—the sector that once powered middle-class growth—thanks to leaps in automation and America’s push into high-skilled, state-of-the-art manufacturing. But as robots have replaced humans, the number of manufacturing jobs has flattened. The higher-value jobs that were supposed to replace those lost to China never materialized; instead came low-wage service jobs. And as the combination of automation and offshoring stifled demand for low-skilled factory workers, wage growth stalled—or even fell. 
 
 Mainstream economists and even the US government (pdf, p.3) would argue that this is a one-sided and overly bleak portrayal of the US manufacturing worker’s plight. After all, according to Ricardian theory, one huge way Americans gain from trade is through cheaper prices of goods made in places with an abundance of unskilled labor, like China. 
 
 For the 55-year-old former machine toolist who now earns minimum wage hauling boxes in a Walmart warehouse, it must rankle to be told cut-price tube socks from China have made him better off. But there’s more than condescension to be outraged about. What economists seldom explain is that the only way for the US to gain from cheaper production in China is by giving up those same jobs at home, according to Ricardo’s model, and employing laid-off workers in more sophisticated, better-paying jobs. 
 
 Why hasn’t this come to pass? Ricardo didn’t account for what might happen when another country devalues its currency against the dollar, forcing the US to run a chronic current account deficit. When this occurs, some of the cheapness of imported goods enjoyed by American consumers doesn’t come from comparative advantage. These supposed “gains from trade” result from one country suppressing its people’s purchasing power in exchange for propping up employment. The US gets the opposite: excessive consumption and job loss. Until those imbalances readjust, America’s trade deficit will persist—and so will joblessness among its lower-skilled workers. 
 
 This isn’t just conjecture. As the much-lauded paper by Autor and colleagues showed, the impact of Chinese exports has tended to concentrate geographically—and last way longer than economic models anticipated. It’s not simply that a factory town losing its plant lets go of workers; rising unemployment and underemployment hurts other local businesses too. Over time, the promise of the American dream—that each generation will live better than the next—fades. 
 
 America’s two major political parties disagree on many things, but they generally agree on the wisdom of free trade. Yet they seldom, if ever, consider the US government’s responsibility to strive for full employment and redistribute wealth to the “losers” of free trade. The cheaper import prices high-skilled US workers enjoyed as low-skill manufacturing jobs shifted overseas came at the expense of America’s poorer, less-educated workers and taxpayers, thanks to the many thousands forced into early retirement or service jobs with no benefits. Neither party cottoned on to the fact that their policies were serving a minority of the country’s workers, at the expense of the rest. 
 
 Until, that is, Trump ran for office on an extended tirade against free trade, vowing to revive American growth through protectionism. And, of course, won. 
 
 What now? 
 
 AP/Evan Vucci Trump talking to workers at the Carrier plant in Indianapolis. 
 
 Trump’s victory highlights the dangers of misinterpreting Ricardo’s theory. For decades, free-enterprise enthusiasts oversimplified the implications of his model, encouraging policymakers to ignore its consequences, and assuring them that free trade always created jobs. That has left the global economy—and American politics—dangerously unstable. 
 
 So does that mean that Trump is right in his anti-free trade crusade? No, says Dani Rodrik, economist at Harvard University. 
 
 “Trump is correct about the malaise that lower and middle class voters feel, but I cannot think of a single trade policy of his that I agree with. He is deluded in thinking that he can bring manufacturing jobs back to the US by changing trade policies,” Rodrik says. “And his belligerent, unilateralist tone on trade policy will do more harm than good.” 
 
 In this sense, Ricardian analysis is right: The jobs America lost in the last half-century would inevitably have been shed due to comparative advantage, as US productivity climbed. To bring them back now would cost the US economy enormously. 
 
 By focusing on tariffs and a global tug of war over factory jobs that doesn’t actually exist, Trump now risks a “politician-made disaster” himself. Just as free trade itself didn’t cause America’s lost jobs and stagnant wages, neither will restricting it fix those problems. Winning global cooperation on exchange rates would help—a lot. But ultimately, to make free trade fair again, instead of “bringing back jobs,” America’s new president should also invest in creating new ones. 
 
 Ford advertisement image courtesy of Joe Haupt via Flickr, licensed under CC-By-SA 2.0 (image has been cropped).
– America's favorite big-box retailer may be responsible for the loss of hundreds of thousands of US jobs since 2001, Fortune reports. According to a new study from the Economic Policy Institute, Walmart's importing of cheap Chinese goods resulted in the elimination of 400,000 American jobs between 2001 and 2013 by increasing the US' trade deficit with China. It's an estimate the EPI calls "conservative." About three-quarters of those lost jobs were likely manufacturing jobs, Fortune reports. "These job losses are particularly destructive because jobs in the manufacturing sector pay higher wages and provide better benefits than most other industries, especially for workers with less than a college education," the study states. The EPI estimates Walmart is responsible for more than 15% of the trade deficit growth from 2001 to 2013, costing 3.2 million US jobs. Fortune reports the EPI's study is based on a 2007 report and—because Walmart doesn't release specifics on its imports—"guesswork." Needless to say, Walmart disagrees with the EPI's findings. "Unfortunately, this is an old report with flawed economic analysis that assumed that imports equal job losses and does not take into consideration that countless jobs are added," Fortune quotes a Walmart statement. Economists agree, pointing to retail and transportation jobs created by importing goods, according to the New York Times. In 2013, Walmart announced it would increase its use of American-made goods by $50 billion over the next decade. But the EPI counters that Walmart's importing of Chinese goods has cost 100 US jobs for every one American job it creates with that program.