In a 1996 speech on the House floor, Representative Nancy Pelosi (D-CA) strongly criticized a then-bipartisan initiative that would grant China Most Favored Nation (MFN) trade status. She pointed out the imbalance in trade relations, emphasizing that while the United States imposed low tariffs on Chinese imports, China maintained high tariffs on American exports.
Pelosi stood firmly against the proposal to open up free trade with China, warning that the ballooning trade deficit was wreaking havoc on American workers and the national economy.
“Today, members of Congress will be asked to set down a marker: How far does China have to go? How much more repression, how big a trade deficit and loss of jobs for the American worker, and how much more dangerous proliferation has to exist before members of this House of Representatives will say, ‘I will not endorse the status quo?’” Pelosi said.
She continued by laying out the economic case against granting China MFN status.
“If we just want to take up this issue on the basis of economics alone, indeed, China should not receive Most Favored Nation status for several reasons that I’d like to go into now. I’d like to call the attention of our colleagues to this chart on the status quo that the business community is asking each and every one of you to endorse today. Right now, we have a $34 billion trade deficit with China … it will be over $40 billion for 1996. Since the Tiananmen Square massacre, this figure has increased 1,000 percent, from $3.5 billion then to about $34 billion now. In terms of tariffs, it’s think it’s interesting to note that the average U.S. MFN tariff on Chinese goods coming into the United States is 2 percent whereas the average MFN tariff on U.S. goods going into China is 35 percent. Is that reciprocal? On exports, China only allows certain U.S. industries into China and therefore only 2 percent of U.S. exports are allowed into China. On the other hand, the U.S. allows China to flood our markets with a third of their exports and that will probably go to over 40 percent and it’s limitless because we have not placed any restrictions.”
Pelosi also sounded the alarm about the implications for American employment, portraying the trade deal as a massive contributor to domestic job loss.
“In terms of jobs, this is the biggest and cruelest hoax of all, not only do we not have market access, not only do they have prohibitive tariffs, not only our exports not let in very specifically, but China benefits with at least, at least, 10 million jobs from U.S.-China trade. The president in his statement, requesting the special waiver said that China trade supports 170,000 jobs in the United States whereas our imports from China support a 10 million jobs at least … the fact is that U.S.-China trade is a job loser.
“Now if you take a country the size of China with the slave labor, the lack of market access, that rips off our intellectual property, the transfer of technology, a country that is not willing to play by the rules in any respect to trade relationship, you have a serious threat … to the industrialized world.”
She didn’t hold back in criticizing her colleagues in Congress for backing the trade arrangement.
“And if there is one message that I want our colleagues to understand today and our constituents is that on this day your member of Congress could have drawn the line to say to the president of the United States do something about this U.S.-China trade relationship that is a job loser for the United States,” Pelosi said.
Pelosi rejected arguments that isolating China economically was unwise, countering that China relied far more on the U.S. than the other way around.
“And this brings us to the point that others have said, ‘Well we can’t isolate China.’ Do you think for one minute that with 10 million jobs at least and $35 billion and over $40 billion this year in a trade surplus — all those billions of dollars in surplus — that the Chinese are going to walk away?” Pelosi continued. “Where are they going to take 35 to 40 percent of their exports? Who’s going to buy them? This is what sustains the regime — the funding and the jobs. They can’t have those people out of work. They have to be worth exporting to the United States.”
Pelosi had long been a vocal critic of Beijing’s oppressive policies. In 1991, she made headlines by joining two fellow legislators in unveiling a banner at Tiananmen Square condemning the Chinese regime’s violent suppression of pro-democracy demonstrators in 1989. In her 1996 speech, she tied her economic objections to MFN status with moral concerns about how American trade would financially empower an authoritarian regime known for its human rights abuses.
Today, however, Pelosi is opposing a very different approach: the effort by former President Donald Trump to enact reciprocal tariffs that reverse decades of globalization and outsourcing.
“Donald Trump’s reckless tariffs will cause chaos in our economy, raise prices for consumers, and hurt hardworking American families. This is not a strategy — it’s the largest tax hike on the American people in history,” Pelosi wrote on X this week.
Yet the warnings she issued nearly 30 years ago have largely proven accurate. In 2018, the Economic Policy Institute (EPI) published a report showing that between 2001 and 2017, America’s trade deficit with China led to the disappearance of 3.4 million American jobs, with losses in every congressional district and across all 50 states. Manufacturing was especially hard hit, accounting for about 74 percent of the job losses — 2.5 million factory jobs altogether. This figure includes 1.3 million jobs lost after 2008.
Pelosi’s own state of California was hit hardest, losing over 560,000 jobs. Texas followed with 314,000 jobs lost, and New York experienced 183,500 job cuts. Other states particularly impacted, based on job losses as a share of total employment, included Oregon, New Hampshire, Minnesota, North Carolina, Vermont, Wisconsin, Massachusetts, and Rhode Island, according to EPI.
But the regions that bore the brunt of the impact were the Midwest and Rust Belt, where communities saw their industries gutted and their economies collapse in the wake of factory shutdowns and job offshoring.
A 2022 report released by the U.S. International Trade Commission (USITC) underscored the long-term damage done by the free trade agenda that Pelosi had cautioned against decades earlier. The report detailed how trade policies made it easier for corporations to relocate production abroad, which in turn kept domestic wages low.
“Participants identified trade policy as the cause of job losses. One union representative noted that trade policies often have loopholes or are manipulated by China and other countries so that the policies are not operating as intended,” the USITC report states.
“Another union representative stated that current trade agreements allow for more capital mobility than the agreements prior to the 1980s, enabling auto, electronics, and steel manufacturers to move overseas for any number of reasons. Various union representatives explained that companies are able to use the threat of moving jobs overseas for various reasons — such as better tax implications and lower wages — to limit the power of labor unions and keep domestic wages down.”
The consequences extended beyond job displacement. Entire towns saw ripple effects, from local businesses losing customers to broader economic despair that hurt families and communities alike.
“Participants noted that, when jobs are lost, local businesses — such as gas stations and restaurants — that rely on affected workers as customers and clients, as well as other businesses in the industry’s supply chain, suffer as a result,” the report states. “A retired steelworker also noted that company bankruptcies can have effects beyond job loss, such as lost pensions.”
The fallout from offshoring didn’t stop at economics. The report linked trade-induced deindustrialization to higher rates of mental illness, drug addiction, suicide, divorce, violent crime, and declining school quality.
Beaver County, Pennsylvania, offers a striking example. When a plant in the region closed due to trade policy, the local economy was devastated. Small businesses, shops, and food stores struggled to survive and many shut down permanently.
“Another union representative noted that, when General Motors Company shut down production in Lansing, Michigan, jobs throughout the local community suffered as a result,” the report states.
“Two other union representatives spoke about the impact of plant closures and production cutbacks on employees. An academic and a business owner reported that plant closures can lead to the loss of opportunity for upward career mobility and a shift to services jobs that tend to have lower wages and fewer benefits. Other union representatives, including one who is retired, said that the closure of the General Motors plant in Lordstown, Ohio, in 2019, and the threat of offshoring has been used to suppress worker wages and benefits. Another union representative spoke about Cooper Tire in Finley, Ohio, which reportedly faced competition from dumped imports from China in 2007. Employees at this facility were reportedly scheduled for shifts that were two days on and two days off and could not file for unemployment.”
In northeast Ohio, an area once represented by Democrat Tim Ryan — who later lost a Senate bid to JD Vance — the consequences of free trade were especially stark. The region saw nearly 25,000 manufacturing jobs disappear after China received MFN status, while drug-related deaths skyrocketed, with some towns seeing increases of over 400 percent.
“A retired union representative said that families and neighborhoods in the Mahoning Valley and Youngstown, Ohio, are still being affected by manufacturing job losses that occurred over 40 years ago, as well as more recent plant closures,” the report states. “She described a cycle of decline, decay, and blight, as the population has dropped to one-third of its previous size and homes lay vacant as children and grandchildren move away.”
{Matzav.com}
