We're not going to let China flood our market.

Sound familiar?

There has to be a level playing field for American companies competing in China.

In the early 2000s, Chinese factories like this one pumped out clothes and flags and cars.

The sticker prices were cheap.

But there was another price to be paid — American jobs.

Every single employee of this plant will be out of work by January.

15 years and almost 6 million jobs later, economists are debating what price another wave of imports could exact from American workers.

But two key differences between then and now may have a new effect on the U.S. economy.

Look at this line before 2001.

American manufacturing employed over 17 million people, making toys, furniture, paper goods, and much more.

Then word began to circulate that China was joining the World Trade Organization.

And here's when it did.

Joining the WTO meant China faced fewer tariffs and restrictions from its trading partners.

And the result was dubbed the China shock.

Those industries were competing with much, much cheaper products made in China and shipped over to the United States.

Consumers were very sensitive to price on things like furniture, so they started buying lots of cheaper furniture that was much the same as the stuff they could get made by American factories.

And that industry in the United States has been decimated.

Almost 2.5 million Americans lost their jobs from 2000 to 2007.

They're represented by the blue on this map.

Look at this dark blue area here.

That's Silicon Valley, where companies like Apple, HP, and Cisco used to manufacture goods.

After 2001, they moved most of their production to China, causing a 50-plus percent drop in manufacturing jobs in the county.

This other dark blue county, Cedar Rapids, Iowa, lost 46 percent of their manufacturing jobs, primarily in furniture and machinery.

But this lighter blue region here was largely spared.

It's called Auto Alley.

The main reason it succeeded, where, say, Silicon Valley's manufacturing failed, is due to investment from competitors like Japan.

Japan started to build a lot more factories in the United States to make cars that it would then sell to American consumers.

So you didn't have the problem of imports displacing American workers because American workers could find jobs at these new factories.

And the auto industry survived and flourished in the United States.

Over the next few decades, American manufacturing jobs shifted away from making low-cost items like crayons to high-cost items like these planes.

But the sectors that were hit were hit hard.

As of 2024, 5.7 million jobs have been lost.

But the rise in Chinese manufacturing wasn't the only reason for these job losses.

Automation and advances in technology mean modern factories need far fewer workers than they used to.

Now, U.S. companies are investing in manufacturing in cars, semiconductors and renewable energy in the States, in part to compete with China.

China is competing in all those.

And it's important to note they're competing in all those, but also still totally dominate every other bit of manufacturing.

That's why the U.S. is threatening to raise trade barriers, which increase the price of foreign goods, like...

A 100% tariff on electric vehicles made in China.

People say, wow.

Well, the idea of raising tariffs to prevent job losses is you make the products that are coming into the country less competitive, so more expensive, than the ones that they produce.

And so consumers will choose the locally made products over the more expensive foreign-made ones.

When it works, it can save jobs.

But it can also keep prices high, meaning consumers wouldn't get the benefits of free trade that they saw in the early 2000s.

So the price of all sorts of things fell.

Price of electronics, the price of furniture, the price of clothes, everything got cheaper.

Inflation basically disappeared for 10 or 15 years because of this huge wave of cheap stuff coming from China.

So for regular Americans, for consumers, it was pretty good, right?

Now, officials have to balance incentivizing locally made products with the risk of restricting market competition and increasing inflation, which is already rising faster than the Fed's target.

We've just had a spell of extremely high and extremely painful inflation in many economies.

So why not embrace the fact that you can get lots of stuff very cheaply for China?

While some economists applaud the benefits to consumers, others worry about the bigger implications of this shock.

This time around, it is definitely industries that are very important to the U.S. economy, very important to all advanced economies, the way they think about themselves.

That's the big difference for me, is that this one kind of affects every sector of manufacturing and is totally global.