In my latest column for AIER, I share part of a conversation with a protectionist. A slice:
Protectionist: Let’s stick to tariffs, shall we? When I go to Walmart and Target, or buy stuff on Amazon, all the labels read “Made in Vietnam,” “Made in Bulgaria,” “Made in Mexico” — never “Made in America.” Nothing today is made in America. My eyes don’t deceive me.
Boudreaux: No, but your limited knowledge does. Those labels don’t mean what you think. In today’s global economy, the great majority of the manufactured goods that you consume consist of parts and ideas from around the world, including the US. A “Made in” label on some good tells you only where that good’s final assembly occurred. Bath towels at Target labeled “Made in Turkey” might well be made of cotton grown in Texas, dyed with pigments from Germany, woven on a loom made in India, and shipped to the US on a freighter made in Korea that is carrying a shipping container manufactured in Denmark. That label would be more accurate if it instead read “Final Processing Done in Turkey” — or, more accurate still, “Made on Earth.”
Because the final processing of most consumer goods is a relatively low-value-added task, Americans’ high wages make it worthwhile for manufacturers to have those tasks performed by lower-wage non-Americans. But goods labeled “Made in Turkey” or “Made in China” frequently contain more inputs made in the USA than in the country named on the label.
Protectionist: Well, maybe some parts of the US are doing okay economically, but you can’t deny that the rust belt has been devastated by the decline of manufacturing there.
Boudreaux: I do deny it. Manufacturing output in the Rust Belt hasn’t declined, at least not in the past twenty years. The St. Louis Fed has quarterly data on real manufacturing output by state going back to the first quarter of 2005. Even in the Rust Belt, manufacturing output over the two decades from then through today (the fourth quarter of 2024) has risen. The inflation-adjusted aggregate manufacturing output of Illinois, Indiana, Michigan, Missouri, New York, Ohio, Pennsylvania, West Virginia, and Wisconsin is today 14 percent higher than it was twenty years ago.
What has declined over the past twenty years is the share of the total workforce employed in manufacturing jobs. But this trend didn’t start twenty years ago, or thirty years ago, or even fifty years ago. It started seventy years ago, in 1954. Indeed, this decline has slowed somewhat since China joined the WTO in December 2001. From January 1954 through November 2001, manufacturing employment as a share of total nonfarm employment fell at an average monthly rate of 0.165 percent. From December 2001 through today (April 2025), that rate of monthly decline slowed to 0.146 percent.
