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American Focus > Blog > Economy > America is a manufacturing powerhouse
Economy

America is a manufacturing powerhouse

Last updated: May 21, 2025 1:40 pm
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America is a manufacturing powerhouse
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In a thought-provoking Bloomberg article by Dan Wang and Ben Reinhardt, a fresh perspective on US manufacturing emerges. Rather than relying on hefty tariffs, they propose a more welcoming approach: inviting foreign investments into American manufacturing facilities. The following excerpt particularly stood out:

However, the more President Trump allows his whims to dictate national policy—be it on trade, immigration, or investor relations—the greater the risk becomes that it won’t be China that finds itself isolated, but rather the United States.

Yet, what if the core argument of this article is fundamentally flawed? Could it be that the US isn’t actually lagging in manufacturing? Given the plethora of narratives surrounding the decline of the Rust Belt, this optimistic viewpoint might seem a stretch. However, consider the graph included in the Bloomberg piece:

It’s crucial to remember that China boasts a population more than four times that of the United States. Therefore, when viewed on a per capita basis, American manufacturing output surpasses that of China by more than two and a half times. In fact, in this metric, the US leads all countries in the analysis, save for Germany, which has a mere quarter of our population. Even nations like Japan and South Korea, renowned for their vigorous export markets, fall behind the US in per capita manufacturing output. This underestimation of American manufacturing might stem from its relatively low share of GDP. Yet, this doesn’t signify a failing manufacturing sector—instead, it indicates that our other economic sectors are so efficient that they elevate our total GDP per capita far beyond that of almost every other nation.

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A recent article by Gary Winslett illustrates that the Rust Belt’s decline is largely attributable to a shift in industrial focus to other regions, particularly the Sun Belt. Additionally, another piece by Ben Glasner reveals that manufacturing workers are more likely to hold college degrees compared to their counterparts in other sectors. This paints a picture of American manufacturing that is far more robust than commonly perceived.

As a final note, while the strong dollar could inflate the perception of our manufacturing prowess, it’s essential to remember that manufactured goods are frequently traded on a global scale. Therefore, adjustments for purchasing power parity (PPP) carry less weight here than they do in the service sector.

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