The Mutual Benefits of US-China Trade

Over the past three decades, trade between the United States and China has not only enriched both nations but has also led to a substantial increase in living standards for ordinary citizens. The reciprocal trade has been a cornerstone of economic growth, allowing each country to exploit its comparative advantage and create a larger economic pie. Despite some controversies surrounding specific trade practices, the overall impact of US-China trade has been overwhelmingly positive.

Key Takeaways:

• Since 1995, the United States has imported $391.5 billion more in Chinese goods, with imports growing from $48.5 billion to $439 billion, resulting in a significant increase in the economic pie for both countries.
• Toys and furniture are among the largest categories of consumer imports from China, with toy prices down 87.5 percent and furniture prices essentially unchanged since 1995.
• Television prices have decreased by 98.5 percent, and apparel prices have remained unchanged, while the overall consumer price index has increased by 111 percent, leading to a real wage increase for ordinary Americans.
• Total civilian employment in the United States has grown from 132 million in 1995 to 170 million today, indicating that international trade has not shrunk the number of jobs but rather changed their mix, favoring high-wage, high-productivity jobs.
• The average sweatshop worker in Chinese factories earned nearly $14 a day between 2010 and 2019, and sweatshop wages grew 100 percent over the decade, while poverty rates in China fell from over 80 percent to 20 percent.
• The US government has legislation in place to prevent the importation of products made with forced labor and to control the export of sensitive military technologies.

Statistics:

• 1995: US imports from China were $48.5 billion.
• 2020: US imports from China were $439 billion.
• Toy prices decreased 87.5 percent since 1995.
• Furniture prices remained largely unchanged since 1995.
• Television prices decreased 98.5 percent since 1995.
• Apparel prices remained unchanged since 1995.
• Overall consumer price index increased 111 percent.
• Total civilian employment in the US grew from 132 million in 1995 to 170 million today.
• Average sweatshop worker wages grew 100 percent between 2010 and 2019.
• Poverty rates in China fell from 80 percent to 20 percent between the respective periods.

Sources:

• [Powell, B. (2025, August 12). The Mutual Benefits of US-China Trade. The Independent Institute.]
• [The Uyghur Forced Labor Prevention Act, 2021]
• [Export Administration Regulations, International Trade Administration, US Department of Commerce]