In the 25 years of this century US imports rose by 10% of GDP (from 5% to 15%) while exports remained static at 11%. US business, workers, and government services lost a full 10% of US GDP every year over 25 years. In 2025 dollars/GDP $31 trillion/yr x 25yrs = $770 trillion lost to the country. If technology, capital and market access were not transfered globally and instead the resources invested in the US. We could have maintained the year 2000 domestic supply rate. Globalization was a mistake. A big one. No way to finesse a soft landing.
Exactly and obsessing about tariffs ain’t the way to do it, we need real industrial policy and cooperation with Europe and other nations that want to be free of China 🇨🇳 This administration is not cooperating with the EU and NATO well
The slow Islamist takeover and increasing totalitarianism in Europe is a risk to the United States; therefore, fully cooperating with Europe poses similar risks as our entanglement with China. We must be ready to decouple from Europe quickly unless they move back towards freedom and liberty and defend against the Islamists.
The threat posed by Islamists to Europe must not be allowed to grow in the United States. Europe should be a warning.
Seriously, Ontario gargbage represents 17% of Michigan Landfills for 25 yrs running. At dirt cheap dumping rates. Protected by a supreme court ruling. Actual Dumping. Literally. Tories.
Shadow banking, currency rigging and multinationals are risks endemic in Europe. Economic determinism places my focus on the money. But I agree the cultural risk may be larger. (PS: my ancestors fought & died in culture wars like Battle of Vienna 1683. Its just our turn.)
Fact check. 2025 US GDP is $30.7 trillion. 10% increased imports replacing domestic production = $3.1 trillion per year. Approx $77 trillion over 25 years. Trillions are not my normal working spaces. Its a very lot of very important work that has left our domestic economy.
Indeed. If it is an environmental problem why would we be OK with despoiling the planet outside our view?? I know the answer of course, but if it is going to be made, better in a place that pays attention to such things. I wonder if Chinese workers could file class action lawsuits against us for knowing better.....
Kudos for addressing seriously the most consequential security and economics issue of our time. Admitting China to the WTO was the worst foreign policy blunder in generations.
I agree with this analysis. I support the principle of free trade based on comparative advantage, but being so dependent on an obvious adversary is suicidal.
About a decade ago there was a proposal called the Trans Pacific Partnership that would have established a trade union among the U.S. and other Pacific Rim countries as an alternative to China, but it was rejected by an unholy alliance of right wing and left wing extremists. That approach needs to be resurrected.
Adam Smith and "comparative advantage" is a crock. Smith wrote it to please his owners, he was bought and paid for by the "Free traders" running the show back then getting the industrial revolution up and running.
I have a master's degree in economics from an accredited state university that teaches the principles of "mixed public/private market economics" that are the basis of the U.S. economic system that most Americans support.
It wasn't Adam Smith, but David Ricardo (around 1817) who accurately described the way that free trade benefits the majority of people in different countries by providing higher living standards. That was at a time when the U.S. Constitution -- with its prohibition on trade restrictions between states -- was proving itself to be an example of the benefits of free trade, even among states or "nations" with differing cultures and economic strengths.
That same principle applies today to trade between nations that share reasonably similar values, but as I said, not to trade with nations like China that use "comparative advantage" in trade to finance their military capability to commit aggression against their perceived "enemies." Those most notably include Taiwan and the United States, but also all of the other countries in the "Pacific Rim" that the totalitarian leadership of the Chinese Communist Party is clearly intent on dominating.
I also voluntarily served in the U.S. Army in support of the "Truman doctrine" of opposition to Communist expansion. How about you?
That is indeed the traditional view. But we also use morality all the time. Many won’t shop at chic filet because of their perceived morality. I don’t expect much morality from government. But I guess the question is whether or not we eventually submit to tyranny. It is the historical human condition.
Yes, we have to start decoupling now. Will be painful having to make stuff again, keep the environment clean, get through all the regulation our lawyers and environmentalists put up and go back to work again. We are way behind the ball and have a lot of work to do if we do. If not, we just keep selling off the farm so to speak as we have for the last 50 years.
Yes agree, cut the military budget in half to help pay for this. Retract back into the Americas to hunker down, clean up our neglected back yard would help drain off the excessive debt and help to rebuild. The expensive overpriced military hardware we have is becoming obsolete anyway as we watch Ukraine, Yemen, and Straits of Hormuz unfold. They are too expensive to make and to protect.
Another useful comparison is to the cost of the "green" transition. Estimates for the EU alone exceed this cost by 2050. Imagine the impact even if we delayed the transition by a decade to enable western supply to manufacture the rare earths, metals and battery technology rather than supporting China's monopoly.
Why would we decouple from China ? Because we cant compete ? If we cant compete, how would decoupling benefit ordinary people in the US ? Would it just mean GM can continue to build second rate cars and remain profitable to the benefit of CEO employees ?
AI will probably be transformative. Why should we decouple form cheap open source Chinese AI models that enterprise can run on their own compute tailored to there specific needs at a fraction of the costs Anthropic. OpenAI and Google want to charge to support their 500 billion in capex ?
Nobody forced American management to deindustrialize and send production to China. Will decoupling from China mean that same management will now be happy to pay more for expensive US labor and US regulatory costs ?
The management types and government central planners are now all hot to decouple because they find that they cannot compete. Americas war lords want to decouple because they are worried that they cannot make their own weapons and the war racket may no longer be profitable.
Because it funds the same country that was responsible for killing 50 million of its own people. Many in power today were alive then and some probably participated. In a country where we boycott businesses because they close on Sundays, this seems like not much of a stretch.
What all the economist are ignoring is the many and very real commons problems created by current trade model guarantees it will either be reformed or collapse. One of the first real ironies is that, even China doesn't realize just how much it relies on the might and power of the US navy to keep the global supply lines flowing to and from it's factories. Yet over the last couple of decades it's become increasingly apparent that not only our we paying a premium to replace and maintain our warships, even then we are falling behind schedule in a mostly peacetime environment. We simply lack the available facilities and experience that having profitable commercial ship builders used to provide. Something we lost largely under the false belief that we should provide freedom of navigation regardless of where the ship was built, owned and/or registered.
And the hits keep coming. Both America and Europe have managed the continued collapse of our industrial bases by expanding welfare and piling the younger generations in student loans. Now America and our Best allies are facing mountains of debt that drastically limit our choices going forward. Europe is confronting this as we speak. As America pulls back and refuses to pay ever more for Europe's defense, Nations like France and England, our two best allies, are burning through prime ministers faster and faster. Seems slashing welfare when there is little but low paying service jobs is some pretty rough politics.
Meanwhile, any illusions that high tech, highly automated factories will resurrect and save western industrial bases, under current trade policies, is a fantasy. China will just steal the IP, then use it's much lower environmental and workers protections to undercut those western companies. Which would mean more of the same in the sense of western companies racing to move those highly automated factories to other nations like Malaysia or Mexico to take advantage of the lower protections for the local workers and the environment.
Of course the cherry on top of the poisonous ice cream Sunday is how those economists ignore that the trillions of dollars that will power China's continued dominance in manufacturing, will come for western investors who are profiting off selling out their fellow countrymen all while demanding those same folks keep providing the protection for their foreign owned assets.
It's not really a question if we're going to decouple from China over the next twenty years. The question is, are we going to do that while we still have a fair amount of control over our own finances and the ability to project power far from our borders? Or, are we going to do it after we've gone bankrupt and had to abandon our friends and allies?
Yet in some ways you should pity the average Chinaman more. The system will change one way of another, yet China is going to be an environmental superfund site for a couple generations. That's not to mention they have also piled up mountain of debt, along with way too many tofu dreg infrastructure projects.
Well done! In other words, factor all the pros and cons based on a long-term perspective.
However, if we had done this previously, we never would have gutted our own industrial and manufacturing capability and sent it all to China.
With all the despair that went with it.
In the 25 years of this century US imports rose by 10% of GDP (from 5% to 15%) while exports remained static at 11%. US business, workers, and government services lost a full 10% of US GDP every year over 25 years. In 2025 dollars/GDP $31 trillion/yr x 25yrs = $770 trillion lost to the country. If technology, capital and market access were not transfered globally and instead the resources invested in the US. We could have maintained the year 2000 domestic supply rate. Globalization was a mistake. A big one. No way to finesse a soft landing.
Exactly and obsessing about tariffs ain’t the way to do it, we need real industrial policy and cooperation with Europe and other nations that want to be free of China 🇨🇳 This administration is not cooperating with the EU and NATO well
Tariffs are one one piece of the pie.
Agree. Multinational profiteering (greed).
Concur Bob and a lot of arrogance too.
The slow Islamist takeover and increasing totalitarianism in Europe is a risk to the United States; therefore, fully cooperating with Europe poses similar risks as our entanglement with China. We must be ready to decouple from Europe quickly unless they move back towards freedom and liberty and defend against the Islamists.
The threat posed by Islamists to Europe must not be allowed to grow in the United States. Europe should be a warning.
Europe and Britian have never been a friend and won't be. We should a line with them when it is in our interests and if not ignore them completely.
Note the capital of Michigan was moved to Lansing fearing British invasion. 1847.
Exactly. And still pissed we never agreed to become one of their 56 common wealth's. No thanks. Friends like that we don't need.
Seriously, Ontario gargbage represents 17% of Michigan Landfills for 25 yrs running. At dirt cheap dumping rates. Protected by a supreme court ruling. Actual Dumping. Literally. Tories.
Shadow banking, currency rigging and multinationals are risks endemic in Europe. Economic determinism places my focus on the money. But I agree the cultural risk may be larger. (PS: my ancestors fought & died in culture wars like Battle of Vienna 1683. Its just our turn.)
If by cooperation you mean paying their way, you are correct.
Fact check. 2025 US GDP is $30.7 trillion. 10% increased imports replacing domestic production = $3.1 trillion per year. Approx $77 trillion over 25 years. Trillions are not my normal working spaces. Its a very lot of very important work that has left our domestic economy.
The author doesn't touch on what I think would be the biggest impediment to 'reshoring' industries: NIMBYism.
We not only need to change environmental laws, we need to change the way people think.
Indeed. If it is an environmental problem why would we be OK with despoiling the planet outside our view?? I know the answer of course, but if it is going to be made, better in a place that pays attention to such things. I wonder if Chinese workers could file class action lawsuits against us for knowing better.....
Kudos for addressing seriously the most consequential security and economics issue of our time. Admitting China to the WTO was the worst foreign policy blunder in generations.
I agree with this analysis. I support the principle of free trade based on comparative advantage, but being so dependent on an obvious adversary is suicidal.
About a decade ago there was a proposal called the Trans Pacific Partnership that would have established a trade union among the U.S. and other Pacific Rim countries as an alternative to China, but it was rejected by an unholy alliance of right wing and left wing extremists. That approach needs to be resurrected.
Adam Smith and "comparative advantage" is a crock. Smith wrote it to please his owners, he was bought and paid for by the "Free traders" running the show back then getting the industrial revolution up and running.
I have a master's degree in economics from an accredited state university that teaches the principles of "mixed public/private market economics" that are the basis of the U.S. economic system that most Americans support.
It wasn't Adam Smith, but David Ricardo (around 1817) who accurately described the way that free trade benefits the majority of people in different countries by providing higher living standards. That was at a time when the U.S. Constitution -- with its prohibition on trade restrictions between states -- was proving itself to be an example of the benefits of free trade, even among states or "nations" with differing cultures and economic strengths.
That same principle applies today to trade between nations that share reasonably similar values, but as I said, not to trade with nations like China that use "comparative advantage" in trade to finance their military capability to commit aggression against their perceived "enemies." Those most notably include Taiwan and the United States, but also all of the other countries in the "Pacific Rim" that the totalitarian leadership of the Chinese Communist Party is clearly intent on dominating.
I also voluntarily served in the U.S. Army in support of the "Truman doctrine" of opposition to Communist expansion. How about you?
It would help if we had a steady predictable administration to guide this multi year process.. I don’t see this in Trump to be honest 😁
When that shit goes down, the vortex may well drag the whole world down with it.
That is indeed the traditional view. But we also use morality all the time. Many won’t shop at chic filet because of their perceived morality. I don’t expect much morality from government. But I guess the question is whether or not we eventually submit to tyranny. It is the historical human condition.
Yes, we have to start decoupling now. Will be painful having to make stuff again, keep the environment clean, get through all the regulation our lawyers and environmentalists put up and go back to work again. We are way behind the ball and have a lot of work to do if we do. If not, we just keep selling off the farm so to speak as we have for the last 50 years.
Yes agree, cut the military budget in half to help pay for this. Retract back into the Americas to hunker down, clean up our neglected back yard would help drain off the excessive debt and help to rebuild. The expensive overpriced military hardware we have is becoming obsolete anyway as we watch Ukraine, Yemen, and Straits of Hormuz unfold. They are too expensive to make and to protect.
Great article, thank you.
Another useful comparison is to the cost of the "green" transition. Estimates for the EU alone exceed this cost by 2050. Imagine the impact even if we delayed the transition by a decade to enable western supply to manufacture the rare earths, metals and battery technology rather than supporting China's monopoly.
Why would we decouple from China ? Because we cant compete ? If we cant compete, how would decoupling benefit ordinary people in the US ? Would it just mean GM can continue to build second rate cars and remain profitable to the benefit of CEO employees ?
AI will probably be transformative. Why should we decouple form cheap open source Chinese AI models that enterprise can run on their own compute tailored to there specific needs at a fraction of the costs Anthropic. OpenAI and Google want to charge to support their 500 billion in capex ?
Nobody forced American management to deindustrialize and send production to China. Will decoupling from China mean that same management will now be happy to pay more for expensive US labor and US regulatory costs ?
The management types and government central planners are now all hot to decouple because they find that they cannot compete. Americas war lords want to decouple because they are worried that they cannot make their own weapons and the war racket may no longer be profitable.
Because it funds the same country that was responsible for killing 50 million of its own people. Many in power today were alive then and some probably participated. In a country where we boycott businesses because they close on Sundays, this seems like not much of a stretch.
Morality is a bad guide to foreign policy. Only interest matters.
What all the economist are ignoring is the many and very real commons problems created by current trade model guarantees it will either be reformed or collapse. One of the first real ironies is that, even China doesn't realize just how much it relies on the might and power of the US navy to keep the global supply lines flowing to and from it's factories. Yet over the last couple of decades it's become increasingly apparent that not only our we paying a premium to replace and maintain our warships, even then we are falling behind schedule in a mostly peacetime environment. We simply lack the available facilities and experience that having profitable commercial ship builders used to provide. Something we lost largely under the false belief that we should provide freedom of navigation regardless of where the ship was built, owned and/or registered.
And the hits keep coming. Both America and Europe have managed the continued collapse of our industrial bases by expanding welfare and piling the younger generations in student loans. Now America and our Best allies are facing mountains of debt that drastically limit our choices going forward. Europe is confronting this as we speak. As America pulls back and refuses to pay ever more for Europe's defense, Nations like France and England, our two best allies, are burning through prime ministers faster and faster. Seems slashing welfare when there is little but low paying service jobs is some pretty rough politics.
Meanwhile, any illusions that high tech, highly automated factories will resurrect and save western industrial bases, under current trade policies, is a fantasy. China will just steal the IP, then use it's much lower environmental and workers protections to undercut those western companies. Which would mean more of the same in the sense of western companies racing to move those highly automated factories to other nations like Malaysia or Mexico to take advantage of the lower protections for the local workers and the environment.
Of course the cherry on top of the poisonous ice cream Sunday is how those economists ignore that the trillions of dollars that will power China's continued dominance in manufacturing, will come for western investors who are profiting off selling out their fellow countrymen all while demanding those same folks keep providing the protection for their foreign owned assets.
It's not really a question if we're going to decouple from China over the next twenty years. The question is, are we going to do that while we still have a fair amount of control over our own finances and the ability to project power far from our borders? Or, are we going to do it after we've gone bankrupt and had to abandon our friends and allies?
Yet in some ways you should pity the average Chinaman more. The system will change one way of another, yet China is going to be an environmental superfund site for a couple generations. That's not to mention they have also piled up mountain of debt, along with way too many tofu dreg infrastructure projects.
The next ten years shall prove interesting.