WASHINGTON — As a trade storm brews over surging Chinese imports, the long-term ramifications of buying the vast majority of apparel from abroad are rippling through intertwined segments of the economy.
Employment is one area that economists watch closely to gauge the nation's fiscal health. It is also an area that is influenced by trade — whether positively or negatively is an issue of considerable debate.
The U.S. economy added 274,000 jobs in April, holding unemployment steady at 5.2 percent. New job figures for May come out today and will be closely watched for signs of further strengthening, although domestic manufacturing will likely continue its downward employment trend.
Domestic producers, however, have long argued the imports have increased their job losses. U.S. apparel and textile plants cut 3,300 jobs in April, making for total employment of 666,500, down from more than 1.5 million employees 10 years earlier.
"If we could have held imports constant over the last 10 years, textile and apparel would have added jobs," said Charles McMillion, president and chief economist of MBG Information Services.
But the debate rages over the impact of free trade on U.S. production and whether the American economy can thrive without a strong manufacturing sector. This divisiveness is seen in the discussions over the merits of the Central American Free Trade Agreement, as well as the need to place more restrictions on textile and apparel imports from China.
"A lot of U.S. apparel employment is very closely and positively tied to imports," said economist Laura Baughman, who is president of the Trade Partnership, an economic consulting firm. "The U.S. apparel industry, for the most part, has gone international."
The nations of the World Trade Organization dropped quotas on Jan. 1, breaking down barriers for global trade. This allowed Chinese apparel and textile imports into the U.S. to shoot up 60.5 percent to $4.77 billion in the first quarter.
The intensity of the increase prompted the Bush administration to implement new import restrictions last month — a 7.5 percent increase cap — on $1.31 billion worth of goods to protect the domestic textile industry, which has already been decimated by closings of mills and steep job losses.
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