Study: Chinese competition crippled U.S. innovation
A growing body of research is confirming the Trumpian view that allowing China's accession to the WTO had negative effects on the U.S. economy. The latest entry into this genre comes from David Autor of MIT, who along with several colleagues studied the relationship between China's joining the WTO and a decline in manufacturing innovation.
According to the research, companies that faced increased competition from Chinese imports "experienced a significant decline in their patent output," which is used a proxy for innovation. This suggests that when faced with tough competition, firms pull back on research and development spending, which also hampers long-term economic growth.
Why it matters: Unlike Mexico, China has many barriers that prevent foreign companies from accessing its market, and it also does much to subsidize its own exporters. There is increasing evidence that shows China's WTO accession and its protectionist policies hurt the U.S. economy.