European Commission President Ursula von der Leyen said last month that the European Union made a “zero-for-zero” tariff offer to get rid of its tariffs on American products if the U.S. will get rid of its tariffs. But Trump was not satisfied with that offer, citing the fact that last year, the U.S. had a trade deficit of over $200 billion with the European Union. Trump has complained about the EU having value-added taxes (VATs) and digital service taxes (DSTs), but these taxes are clearly not the primary reason the U.S. has a trade deficit with Europe — the United Kingdom also has a VAT and a DST, yet the U.S. runs a trade surplus with the United Kingdom. Even in a world with no trade barriers, the U.S. would run a trade surplus with some countries, and a trade deficit with many others.
[DBx: So much for the notion that Trump will eliminate U.S. tariffs if other countries eliminate theirs.]
Scott Sumner is correct: “America is a manufacturing powerhouse.” A slice:
It is important to recall that China has more than 4 times America’s population. Thus, in per capita terms, American manufacturing output is more than two and a half times larger than that of China. Indeed, in per capita terms, the US leads every single country on that list, except for Germany (which has 1/4th our population). We even lead countries like Japan and South Korea in per capita manufacturing output, despite their impressive export sectors.
I suspect that people underestimate American manufacturing because it is a relatively low share of GDP. But that doesn’t reflect the fact that our manufacturing sector is doing poorly—it isn’t—rather, that our other sectors are so productive that our total GDP per capita greatly exceeds that of almost all other countries.
Finally, another big problem with the “China shock” narrative is that the overall employment changes during the period were largely balanced. That is, any negative employment effects from increased import competition were offset by a corresponding increase in exports and export-related jobs. (This offsetting effect occurred even with the lingering labor market problems from the Great Recession.)
Overall, the evidence simply does not support that increased trade with China decimated manufacturing in the United States. Even the job losses concentrated in the Rust Belt, whatever their cause, were offset by new jobs in the South. The net effect of these changes has made Americans richer, and policies designed to shrink trade will only make Americans poorer.
Vladimir Snurenco makes clear that humanity would be much poorer without plastic. A slice:
Plastic-packaged food lasts much longer — a huge win for the poorest one billion people. Airtight plastic containers keep everyday staples like maize flour, rice, and cooking oil fresher, more affordable, and easier to store. Moreover, plastic packaging enables food to travel longer distances and reach remote areas more easily. This is especially important in poor regions, where road infrastructure is lacking and refrigeration is rare.
In healthcare, plastic syringes and protective gear like gloves and masks have made a big difference. Single-use plastic equipment helps reduce infection rates and has played a huge role in vaccine distribution. Plastic medical equipment is vital to protecting the world’s most vulnerable from disease and death.
Amy Willis talks with Juliette Sellgren about Juliette’s marvelous podcast, The Great Antidote.
