As advances in generative AI continue, US policymakers should heed two lessons from the opening of trade with China. But that will require them to rethink the conventional wisdom about deindustrialization and the decline of manufacturing employment.

WASHINGTON, DC—Few issues in the public square are uncontested. But the narrative that the United States’ decision, driven by elite considerations, to open trade with China led to the loss of a large number of manufacturing jobs and deindustrialization comes close. Democrats and Republicans, the mainstream media, commentators of all stripes, and even economists hold, advance, and defend this version of events. And yet every part of it is off base.