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Inside Fuyao Glass, a Chinese-owned factory in Moraine, Ohio. Photo: Andrew Spear/Washington Post/Getty Images

Automation and offshoring have destroyed millions of U.S. manufacturing jobs in the last 2 decades, but another, less-discussed threat to those jobs is the U.S.-China trade war.

The big picture: Almost a fifth of all manufacturing jobs in the U.S. are created by foreign companies that put their factories in American towns to get closer to the U.S. market, according to Brookings, and around a quarter of U.S. exports come from factories owned by foreign countries, reports the Washington Post.

Why it matters: As the Trump administration ramps up its multifront trade war with China, a number of foreign companies are reconsidering their place in the U.S. While some are concerned about doing business in an "America First" environment, others appear to be delaying big-ticket projects — with scores of jobs hanging in the balance.

  • Chinese investment in the U.S. dropped almost 90% from 2016 ($46 billion) to 2018 ($5 billion), per the Rhodium Group. "Trade and other economic frictions between the two countries have substantially reduced the attractiveness of the U.S. as a destination for Chinese foreign direct investment," says Eswar Prasad, a trade policy expert at Cornell.

The backdrop: Chinese companies went from employing 500 U.S. workers in the manufacturing sector in 2007 to over 26,000 as of 2016, according to the Bureau of Economic Analysis. "It seemed like it was on this dramatic uptick," says Joe Parilla, a scholar at Brookings.

  • In some cases, Chinese companies have stepped in to bail out failing American factories. As documented in Netflix's "American Factory," China's Fuyao Glass bought a shuttered General Motors plant in Ohio in 2014 and turned it into a glass supplier for the American automaker.

"FDI [foreign direct investment], including from China, has been a significant source of manufacturing employment growth," says Brookings' Mark Muro. "But now that is ebbing."

In Arkansas, 2 factories bought by Chinese companies stand vacant as the trade fight rages on.

  • In 2017, a Chinese firm bought a factory in Forrest City, Arkansas, that had been empty for 10 years and pledged to create 800 jobs, an investment that would have made that company the biggest employer in the county, reports the American Communities Project. Two years later, the facility is still a ghost town.
  • “There are various factors that have gone into the delay, but the main factor is the tariffs,” Forrest City Mayor Cedric Williams told the American Communities Project. “We’re at a standstill until they get that resolved.”

Another Chinese company's plan to build a paper mill is on hold in Arkadelphia, Arkansas. In an interview with Christian Science Monitor, Stephen Bell, who heads the city's chamber of commerce, called the trade conflict "a dark cloud hanging over the future of the project."

What to watch: In another potential blow to Chinese-owned companies in the U.S., the Trump administration is considering restricting American firms from investing in them, reports Bloomberg.

Go deeper

Senate retirements could attract GOP troublemakers

Sen. Roy Blunt (R-Mo.). Photo: Jim Lo Scalzo/EPA/Bloomberg via Getty Images

Sen. Roy Blunt's retirement highlights the twin challenge facing Senate Republicans: finding good replacement candidates and avoiding a pathway for potential troublemakers to join their ranks.

Why it matters: While the midterm elections are supposed to be a boon to the party out of power, the recent run of retirements — which may not be over — is upending that assumption for the GOP in 2022.

Congressional diversity growing - slowly

Data: Brookings Institution and Pew Research Center; Note: No data on Native Americans in Congress before the 107th Congress; Chart: Danielle Alberti/Axios

The number of non-white senators and House members in the 535-seat Congress has been growing steadily in the past several decades — but representation largely lags behind the overall U.S. population.

Why it matters: Non-whites find it harder to break into the power system because of structural barriers such as the need to quit a job to campaign full time for office, as Axios reported in its latest Hard Truths Deep Dive.

Staff for retiring Senate Republicans a K Street prize

Illustration: Eniola Odetunde/Axios

The retirements of high-profile Senate Republicans mean a lot of experienced staffers will soon be seeking new jobs, and Washington lobbying and public affairs firms are eyeing a potential glut of top-notch talent.

Why it matters: Roy Blunt is the fifth Republican dealmaker in the Senate to announce his retirement next year. Staffers left behind who can navigate the upper chamber of Congress will be gold for the city’s influence industry.

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