Import Competition and U.S. Sentiment Toward China

We empirically examine how import competition affects sentiment toward China in local communities in the United States using a news-based index for sentiment. Results are threefold. First, U.S. sentiment toward China peaked in 2007 before turning negative. Second, communities more exposed to import competition from China have experienced a greater deterioration in sentiment. Third, the trade-induced U.S. sentiment toward China is broad-based, encompassing political, military, and national security issues. These findings suggest that competition over trade may have important geopolitical implications through sentiment of local communities.