Analysis explores the decline in productivity growth in US manufacturing due to import competition from China, suggesting significant economic implications.
After registering a 3 percent annual rate from 1948 to 2010, the growth of labor productivity in US manufacturing since 2010 has come to a cold stop, with a zero 2010–2025 annual growth rate. What caused the disappearance of productivity growth in the core of the US economy? We point to the channels by which an invasion of imports, led by China in the 2000–2010 decade, eroded the competitiveness of US producers. Imports competed away sales, closed plants, cut capacity utilization, slashed profits and investment, postponed installation of modern technology, and diverted resources from R&D and innovation.
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Gordon et al. (2026) studied this question.
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