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Global Economic Forces Conspire to Stymie U.S. Manufacturing
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Global Economic Forces Conspire to Stymie U.S. Manufacturing

David Dollar
Brookings Institution, 2016
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Recommendation

Donald Trump’s 2016 election win was largely due to dissatisfaction with the exodus of manufacturing jobs from the United States and Trump’s promise to bring them back. Americans certainly had reason to bemoan the loss of such jobs, which shrank from 17 million in 2000 to 11 million in 2010. Even after an economic recovery, the manufacturing comeback has been small. Can President Trump recoup these jobs through protectionism? As economist David Dollar explains in this concise overview, three major trends make such an outcome unlikely. While always politically neutral, getAbstract suggests this article to anyone interested in the impacts of trade policies on the US economy.

Summary

Three economic verities could keep the US manufacturing sector from regaining the jobs it has lost since the turn of the 21st century. First, technology – not trade policy – has been the main driver behind employment losses in manufacturing. With new technologies in place, businesses have been able to raise productivity without an accompanying increase in jobs. This phenomenon has occurred even in trade-surplus countries like Germany, which saw a 15.5 percentage-point drop in manufacturing’s share of labor from 1973 to 2010, a decline that mirrors the US’s 14.7 point fall. If America...

About the Author

David Dollar is a senior fellow at the John L. Thornton China Center at the Brookings Institution.

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