This paper finds a link between the sharp drop in U.S. manufacturing employment beginning in 2001 and a change in U.S. trade policy that eliminated potential tariff increases on Chinese imports. Industries where the threat of tariff hikes declines the most experience more severe employment losses along with larger increases in the value of imports from China and the number of firms engaged in China-U.S. trade. These results are robust to other potential explanations of the employment loss, and we show that the U.S. employment trends differ from those in the EU, where there was no change in policy. The U.S. granting of Permanent Normal Trade Relations (PNTR) to China eliminated the uncertainty associated with annual renewals of low tariff rates. This policy change likely strengthened import competition and suppressed U.S. employment growth. The paper uses the "NTR gap" – the difference between NTR tariff rates and non-NTR rates – to measure the potential effect of PNTR. The NTR gap varies across industries, and the paper finds a negative and statistically significant relationship between the change in U.S. policy and subsequent employment growth in manufacturing. This relationship is also economically significant, with a reduction in employment growth of -3 to -4 percentage points compared with the same interval after the 1990 peak. The paper also finds that PNTR is associated with increases in the number of U.S. importers, Chinese exporters, and importer-exporter pairs. This suggests that firms reacted to the policy change by making irreversible investments. The paper also finds that PNTR has a more profound effect on production workers than non-production workers. The paper uses transaction-level U.S. import data to provide circumstantial evidence that these changes in employment are driven in part by offshoring. The paper finds that U.S. imports of the goods most affected by the policy change increase substantially after 2001, and that this growth is driven by imports from China. The paper also finds that the jump in trade value is mediated by a relative expansion in the number of U.S. firms importing from China, the number of Chinese firms exporting to the United States, and the number of U.S.-China importer-exporter pairs. The paper also finds that the effects of PNTR are transmitted via up- and downstream industries, with exposure along both dimensions associated with a greater probability of plant death. The paper concludes that PNTR is associated with a significant decline in U.S. manufacturing employment, particularly in industries most affected by the policy change.This paper finds a link between the sharp drop in U.S. manufacturing employment beginning in 2001 and a change in U.S. trade policy that eliminated potential tariff increases on Chinese imports. Industries where the threat of tariff hikes declines the most experience more severe employment losses along with larger increases in the value of imports from China and the number of firms engaged in China-U.S. trade. These results are robust to other potential explanations of the employment loss, and we show that the U.S. employment trends differ from those in the EU, where there was no change in policy. The U.S. granting of Permanent Normal Trade Relations (PNTR) to China eliminated the uncertainty associated with annual renewals of low tariff rates. This policy change likely strengthened import competition and suppressed U.S. employment growth. The paper uses the "NTR gap" – the difference between NTR tariff rates and non-NTR rates – to measure the potential effect of PNTR. The NTR gap varies across industries, and the paper finds a negative and statistically significant relationship between the change in U.S. policy and subsequent employment growth in manufacturing. This relationship is also economically significant, with a reduction in employment growth of -3 to -4 percentage points compared with the same interval after the 1990 peak. The paper also finds that PNTR is associated with increases in the number of U.S. importers, Chinese exporters, and importer-exporter pairs. This suggests that firms reacted to the policy change by making irreversible investments. The paper also finds that PNTR has a more profound effect on production workers than non-production workers. The paper uses transaction-level U.S. import data to provide circumstantial evidence that these changes in employment are driven in part by offshoring. The paper finds that U.S. imports of the goods most affected by the policy change increase substantially after 2001, and that this growth is driven by imports from China. The paper also finds that the jump in trade value is mediated by a relative expansion in the number of U.S. firms importing from China, the number of Chinese firms exporting to the United States, and the number of U.S.-China importer-exporter pairs. The paper also finds that the effects of PNTR are transmitted via up- and downstream industries, with exposure along both dimensions associated with a greater probability of plant death. The paper concludes that PNTR is associated with a significant decline in U.S. manufacturing employment, particularly in industries most affected by the policy change.