I am a China Outsourcer. And, yes, I have felt guilty.
I have justified my involvement in outsourcing because I believed free trade was good, and because I saw the positive impact trade made on the lives of those I knew best in Asia. When economists say a billion people were lifted out of poverty because of trade, I am happy—proud even—to have contributed in my small way.
But my lane in the flow of trade mostly ran one way: from American companies to their overseas supply chains. I saw the dramatic upside. My business seldom required me to look the other way: toward American labor, or toward our rural towns where the results of globalized trade were, let’s say, more mixed.
While I am aware of the loss of American jobs, and while I have indeed driven through Mid-West towns that look pretty depressing, it’s always been easy for me to justify all that as the relatively small downside to what was a massive global good. In the grand scheme of things—on a humanity-wide scale—it seemed there was more upside than downside, more winners than losers.
But for those who have lost, that is thin consolation, I’m sure.
So, to appease my inner conflict, I went looking for the so-called losers of trade. For those groups whom the pundits say were gutted by globalization: you know, the working class; the rural Main Streets; the factory worker with hardhat in hand looking at a shuttered factory door.
I’ve spent the last 5 years involved in US onshoring projects. I should have been able to find them by now. But alas, I have not.
Don’t get me wrong, I found individual losers in trade, but I found no monolithic groups, no class of people, no race, no specific occupation that was uniformly ruined because of global trade. What I found was disruption: broad, uneven and deeply personal. I found that some managed it well, and some did not, some got lucky, some did not.
For example:
Ambridge, PA was built around the American Bridge Company—the town is actually named after the factory. When global steel surged and US infrastructure spending stalled, the factory shut down and the town faded.
Everett, WA was also a one company town, but that company was Boeing. Despite some recent stumbles it’s still going strong. Local aerospace suppliers thrived. So did the town. Everett didn’t win because it was smarter. It won because its commercial anchor held.
Smith Center, KS shrank with agriculture consolidation, where family farms lost out to corporate AgTech behemoths.
But then there’s Storm Lake, IA, only two hours away, which thrived with a meatpacking facility, working on top of adjacent agriculture, which provided enough economic momentum to fuel a wave of new immigrants.
Even in the same place, outcomes varied:
Darrell, from Ambridge and a member of the Steelworker’s Union, lost his job and got retrained… for web design, in a town with not much broadband. Mike, his neighbor, bought a used CNC machine off the old plant and started exporting custom-made specialty car parts online.
Eugene, a warehouse clerk in Wyoming, was displaced by Amazon and automation. Cody, living nearby in the same state, shifted from coal mining to bentonite clay, supplying Asia’s boom in this commodity. He’s thriving.
Carl and Janice’s hardware store on an actual Main Street in Nebraska was killed by Walmart. Lisa, a soybean farmer forty miles away, upgraded her equipment and sells in bulk to Shanghai.
It’s heartbreaking to be on the losing end. But that end didn’t belong to one town, one class, or one career. Trade’s impact landed unevenly, scattered across the map, and is etched uniquely into individual lives.
And believe or not, it’s the same story in China.
Li Meihua left her Sichuan village for a toy factory job. It paid poorly by U.S. standards, but enough to change her son’s future, so she stuck at it for 10 years, living in dorms and eating in mess halls. She saw that son once a year at Chinese New Years.
Mr. Wang was laid off from a state-owned steel mill and found nothing to catch him. He drifted through odd construction jobs. He was one of over 40 million state workers laid off during China's reforms.
A Uyghur farmer in Xinjiang lost his land to industrial cotton. Infrastructure came. So did surveillance, tied to the government’s fear of a local independence movement. The province built an export machine but erased local culture.
Trade lifted 800 million Chinese out of poverty but not all equally. It rewarded mobility and adaptability. It punished those tied to place, tradition, or to an older social contract. The pattern mirrored America’s: some thrived, others fell behind.
So what happened?
Peter Navarro, Trump’s trade tsar, paints global trade—especially with China—as a calculated assault on American workers and national security. He argues that China "floods U.S. markets" with subsidized exports and artificially cheap currency, making it "virtually impossible for American companies to compete." (Navarro, Death by China, 2011).
While Ambridge and Smith Center might agree, Everett and Storm Lake would disagree.
Senator Bernie Sanders has argued that trade deals have systematically harmed American workers. He opposed NAFTA, CAFTA, PNTR with China, and the TPP, calling them “disastrous trade agreements.” Sanders frames trade not as mutually beneficial, but as fueling a "race to the bottom" that undermines wages, labor rights, and middle-class stability. (Senate Speech, 2016)
While Darrell, Carl and Janice might have screamed in support at a Bernie Sanders fundraiser, Mike, Cody and Lisa would have rolled their eyes and flipped the channel.
The truth is this. China’s rise was not a Bond villain plot, nor a capitalist betrayal of the working class. It was an historic, once-in-a-millennium disruptive occurrence: a civilizational return, where one billion people in China rejoined the global marketplace after a century and a half of forced and unnatural absence from it. (Revolution, World Wars, Maoism.) That is one-fifth of humanity who, as of 1978, had been almost completely cut off from the modern world economy, yet who, in the span of just two decades, entered it all at once.
Of course it was disruptive. How could it not be? It was a tsunami that rolled in from across the sea, throwing everything into flux: capital, labor, trade, and politics. It wasn’t anyone’s political genius, nor anyone’s economic mistake. The Chinese Communist Party didn’t masterplan this with five-year charts and Leninist precision. And President Clinton didn’t unleash it with a single handshake in 2000.
It was a tectonic geopolitical shift, like the invention of the railroad, or the emergence of the internet. Those phenomena also radically reorganized our society, and then like now, there were those who won and some who lost. Trying to stop China’s economic integration is like trying to go back in time and undo the railroad or un-invent the internet.
You can’t.
And like all such disruptions, some people, like me, were on the right island at the right time, and rode the wave with relative ease. Others, like my relatives in Ohio, stood in its path and were knocked flat. That doesn’t mean the wave was malicious. It means it was massive. I didn’t deserve my advantage any more than my relatives deserved the harm.
When I talk about my guilt as a China outsourcer, it arises from me recognizing that by the strange accident of my birth in Taiwan, and the gift of the Mandarin Chinese language given me as a child, I was uniquely equipped to ride this tsunami to a well-paid and comfortable end. Likewise, by the mere accident of being born in Ambridge, Pennsylvania at the same time, would have put my contemporary on a less prosperous path. I feel that unfairness deeply.
But I cannot then throw out the idea of trade as a result.
In 1981, over 40% of the world lived in extreme poverty, defined as living on less than $2.15 per day. By 2019, that number fell to under 9%. That’s more than one billion people lifted from destitution. China alone saw over 800 million people escape extreme poverty, going from 85% in 1981 to virtually 0% by 2020.
And on the U.S. side? Trade translated into staggering gains: firms tapped into low-cost manufacturing abroad, dramatically lowered their cost structures, and scaled globally in ways that would have been unimaginable in a closed economy. American corporations offshored production, yes, but retained control of branding, design, finance, and intellectual property. The result was a windfall of corporate profits and a stock market boom that far outpaced global peers. By 2020, U.S. equities accounted for nearly two-thirds of total global stock market capitalization; an astonishing leap from just one-quarter of global capitalization in the 1980s. (World Federation of Exchanges, 2020.)
Ninety percent of economists support the elimination of trade barriers. Studies from the IMF, World Bank, WTO, and NBER agree: trade, while disruptive, yields long-term net gains. It increases competition, spreads technology, lowers consumer prices, and raises overall welfare.
A billion people leaving poverty is not an abstraction. It’s a miracle. It’s school instead of child labor. Chicken and rice instead of boiled weeds. Life instead of sickness and a slow death.
Trade was a success. It is still a success.
But, for sure, the gains were mismanaged.
The real problem isn’t what trade did to our communities. It’s what greed did to them.
Yes, trade created disruption. But disruption, in itself, is not the enemy. The enemy was how the rewards from that disruption were so poorly distributed throughout our society.
Peter Navarro and Bernie Sanders, as different as they are, both saw a too much decay in the American hinterland; at least too much given how much money trade brought into the U.S.. And they weren’t entirely wrong. Factories did close. Wages have stagnated. Some communities have hollowed out.
But they were wrong about the cause. The disease isn’t trade. It’s hoarded gains.
In China, the Communist Party clamped down on capital flows. The money earned from exports didn’t circulate freely through society. Instead, it was funneled into state-owned enterprises, massive infrastructure projects, and geopolitical vanity efforts like the Belt and Road Initiative. Private entrepreneurs were often stifled by red tape or politically targeted, while average citizens had limited ways to invest, save, or spend outside the confines of Party control. Capital controls and restricted financial markets meant ordinary Chinese people couldn’t build much real wealth as the nation grew.
In the United States, the hoarding happened differently, but the effect was the same. Corporate giants benefited massively from global trade. They lowered costs, expanded profit margins, and grew market share. But instead of reinvesting in towns that lost factories, they bought back their own stock. In 2018 alone, U.S. companies spent over $800 billion on stock buybacks. That money didn’t go to workers or infrastructure. It went to shareholders.
They also dodged the taxman. Using schemes like the “Double Irish with a Dutch Sandwich,” firms like Apple, Google, and Facebook shifted profits to low-tax jurisdictions, starving the U.S. Treasury of revenue. A 2017 ITEP report estimated that Fortune 500 companies held $2.6 trillion offshore, avoiding over $750 billion in U.S. taxes.
And what about the communities hit hardest by trade? They were told there wasn’t enough money for job retraining or infrastructure renewal. They watched roads crumble and schools downsize, even as GDP climbed and stock indices soared. Given the national windfall, that is not the result we should have seen.
So let’s be clear: trade wasn’t the culprit. The problem was our refusal to build systems that spread its benefits.
The answer is not now to retreat. Not tariffs. Not nostalgia. Not a made-in-America sticker on something no one can afford.
The answer is to finish what we started.
Trade was supposed to be a tide that lifted all boats. But that only happens if we fix the piers and widen the docks. It happens when we reward reinvestment, build new institutions of solidarity, and tax properly where value is created, with those taxed willing to be real citizens and pitch in to the national project of renewal.
There are models for this. Denmark, Germany, even South Korea show how states can absorb the gains of globalization while protecting local cohesion. Wage insurance, job mobility accounts, portable benefits—none of these are radical.
They’re just overdue.
We’ll talk about them next.
Some resources.
ITEP, Offshore Shell Games 2017: The Use of Offshore Tax Havens by Fortune 500 Companies
World Bank, Poverty and Shared Prosperity 2020: Reversals of Fortune-Frequently Asked Questions, October 7, 2020.
University of Chicago IGM Forum, 2018
Klein, Matthew C., and Michael Pettis. Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace. New Haven, CT: Yale University Press, 2020
Congressional Research Service, Stock Buybacks: Concerns over Debt‑Financing and Long‑Term Investing (Washington, DC: CRS, May 9, 2018)
Another brilliant smart piece. I can’t help think about Lisbon Ohio , our family’s place at Teegarden and your
Points show exactly what happened there. Nothing.