A chronic housing slowdown and high youth unemployment rate have made China more vulnerable than it was in President Trump’s first term.
President Trump taunted China in his first term, claiming his tariffs had led to the loss of five million jobs there. In a 2019 tweet, he said his trade policies had put China “back on its heels.”
Economists sharply disputed how much pain Mr. Trump’s tariffs caused, but the message underscored the centrality of jobs to China’s export-reliant economy.
Four months into Mr. Trump’s second term, the United States and China are again negotiating over tariffs, and the Chinese labor market, especially factory jobs, is front and center. This time, China’s economy is struggling, leaving its workers more vulnerable. A persistent property slowdown that got worse during the Covid-19 pandemic has wiped out jobs and made people feel poorer. New university graduates are pouring into the labor pool at a time when the unemployment rate among young workers is in the double digits.
“The situation is clearly much worse,” said Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at the investment bank Natixis.
As employment opportunities in other sectors disappear, she said, the importance of preserving China’s 100 million manufacturing jobs has grown.
This month, Chinese and U.S. officials agreed to temporarily reduce the punishing tariffs they had imposed on each other while they tried to avert a return to an all-out trade war that would threaten to undermine both economies.
