* U.S. trade deficit hit record $295 billion in 2011
* Reports says biggest jobs losses in manufacturing sector
* China currency practices called major cause of trade
WASHINGTON, Aug 23 The huge U.S. trade deficit
with China, fueled by Beijing's actions to depress the value of
its currency, displaced or eliminated more than 2.7 million
American jobs between 2001 and 2011, the labor-friendly Economic
Policy Institute said on Thursday in its latest look at the
The institute estimated that nearly 77 percent, or more than
2.1 million of the lost jobs, were in manufacturing.
The think tank receives about 30 percent of its funding from
union groups, which have pressed both the administration and
Congress for tougher steps to rein in the growing trade deficit
with China, which hit a record $295 billion in 2011.
China, known as the world's factory because of its huge
manufacturing sector, is the world's second-largest economy,
having raced past Japan in recent years.
Robert Scott, the institute's director of trade and
manufacturing policy research, said Chinese government
intervention in currency markets to keep its yuan at a low value
against the U.S. dollar was a major cause of the trade deficit.
China's undervalued currency effectively subsidizes its
exports and taxes its imports, he said.
Scott told Reuters he believed the yuan was still
undervalued by at least 33 percent against the dollar, even
though it has risen in value in recent years.
Republican president challenger Mitt Romney has pledged to
formally declare China a currency manipulator on his first day
in office. No Treasury Department, under both Republican and
Democratic administrations, has labeled any country a currency
manipulator since 1994, when China was last cited.
The Obama administration has declined to label China in
seven semi-annual Treasury Department reports.
Administration officials say they have made progress with
China on the currency issue over the past few years without
ratcheting up tensions by formally labeling Beijing. The next
semi-annual report is due on Oct 15.
Last year, the institute estimated the U.S trade deficit
with China displaced 2.8 million jobs between 2001 and 2010.
The slightly lower number in this year's report reflects
changes made by the Bureau of Labor Statistics to benchmark jobs
data, Scott said.
The biggest U.S. job losses were in the production of
computers and electronics, clothing, textiles, fabricated metal,
furniture and fixtures, plastics and rubber, and autos and auto
parts, the report said.
Job losses were spread among all 50 states, with the most in
California, Texas, New York, Illinois and North Carolina, the