With $373 billion invested in our economy, it’s no wonder that Japan has an interest in maintaining close economic relations and seeing the U.S. economy succeed. When Japan’s Prime Minister Shinzo Abe meets with President Trump this week, Abe is expected to present his “U.S.-Japan Growth and Employment Initiative,” a gesture that reflects that commitment.
Helping one set of manufacturing workers can put others in harm’s way. For example, anti-dumping duties on primary metals might help 400,000 metal workers, but it also disadvantages 6 million other manufacturing workers, whose families and communities equally value their jobs.
Sure, it’s good when American companies export goods and services to the world. But imports make many American-made products more competitive as well as enriching our lives as consumers – they are part of the secret sauce of what makes our economy work so well.
Shortly after his election in November, President-elect Donald Trump announced he made good on one of the promises of his campaign – to save jobs at a Carrier plant in Indiana that had been slated to move to Mexico. Trump’s announcement was great news for the Carrier employees who are keeping their jobs but it also perpetuates some misconceptions about where companies choose to locate and why and what it takes to bring back jobs to the United States.
Last year, real estate research group Zillow determined that homes located within a quarter-mile of a Starbucks coffee shop increased in value by 96 percent. Starbucks is a premium brand. So is North America. We’re lucky in the United States because Canada and Mexico are the kind of neighbors that increase our value.
On the average day, approximately $2.4 billion worth—2 million tons—of goods move between the United States, Canada, and Mexico. Co-production of world-class products made has given North America an advantage over other regions in the world.
Thanks to technology and policy improvements, modern production is increasingly organized around the set of tasks required to bring a product to market, from invention to final use. These tasks form “value chains” of different firms in different places whose activities are precisely coordinated.
Politicians critical of trade and globalization often point to the decline in U.S. manufacturing jobs as proof positive of America’s dwindling economic might. But the story of U.S. manufacturing shouldn’t begin and end with that single statistic. The true state of U.S. manufacturing is far more complicated – but also more hopeful.
In the modern global economy, most products are not wholly made in one country. Even the services you buy can be composed of inputs from various countries around the world — like the story of our TradeVistas logo designed by an artist in Indonesia commissioned through a company aggregating design services out of Australia.
Trade agreements aren’t the principle factor to blame for the majority of U.S. job losses or the decline in earnings. Many factors determine total employment.