Welcome to the President's Inbox, a CFR podcast about the foreign policy challenges facing the United States.

I'm Jim Lindsay, Director of Studies at the Council on Foreign Relations.

This week's topic is A Second China Shock.

With me to discuss China's recent export surge and its consequences for the United States in the global economy is Brad Setzer. Brad is the Whitney Sheperton Senior Fellow at the

Council, where he writes on global trade, capital flows, and sovereign debt issues.

Brad has held several positions in the U.S. government, most recently as senior advisor to the U.S.

trade representative from 2021 to 2022.

Among Brad's recent publications is a co-author piece on China's record manufacturing surplus. You can find it on its blog,

Follow the Money, which is hosted on cfr.org. Brad, thank you for coming on the president's inbox.

Oh, thanks a lot for inviting me. I want to dive into the causes and consequences of what is being called

the second China shock.

But before we do that, Brad, some context would be helpful.

What was the original China shock?

China was, after a long negotiation, China entered into the WTO, World Trade Organization

in 2002.

After China entered into WTO, Chinese exports took off, grew at a phenomenal pace.

And during that period of very, very rapid growth. And then rapid growth here means 30% year

over year. We're not talking a little bit. We're talking explosive growth. Big numbers.

Big numbers. And there's, you know, obviously a

corresponding increase in U.S. imports and European imports. During that period, there was a sharp

fall in U.S. manufacturing employment. And a set of economists, David Otter at MIT,

Otter Dorn and Hanson looked at employment and job market outcomes in those

...