Trade Deficit in Goods Worsens to All-Time Worst in 2024, Small Surplus in Services Rises, Overall Trade Deficit Worsens by 17%

by Wolf Richter • Feb 5, 2025

Three decades of connivance by the US government – which bridged with ease any political divide – and Corporate America, under the failed doctrine of globalization, have destroyed much of the manufacturing base so that corporate profit margins could fatten by chasing cheap labor, lax environmental laws, and preferential treatments in US and foreign tax codes.

In return, they sacrificed the most important economic sector – manufacturing – with its huge primary, secondary, and tertiary impact on employment, on household incomes, on federal, state, and local tax receipts, on knowhow in automation and manufacturing technology, on engineering and engineering education, and on infrastructure. In the process, they shifted much of this activity and expertise to other countries.

The US is still the second largest manufacturing country by output in the world, with a share of 15.9% of global manufacturing output, and larger than the next three combined – Japan 6.5%, Germany 4.8%, and India 2.9%. But China’s manufacturing output is nearly twice that of the US, with a share of 31.6% of global output (World Bank data).

Meanwhile, the globalization-mongers hate tariffs because they’re a tax on the gross profit margins of the importers among Corporate America and hit stocks because passing that cost on to consumers in a competitive market isn’t easily possible. I watched it last time, amazed by the lack of inflation.

DYI:  I’m suspicious of both political parties however I do agree with the tariffs.  They simply don’t go far enough, what is needed IMO, is an across the board 25% tariff on any goods or services coming into the country.  This would have to be as the expression goes “no ifs, ands or buts” mentality.  Then pass investment led spending and most importantly tax incentive for a manufacturing renewal.  The rallying cry would be build baby build alongside drill baby drill!