American industry has been a driving force in the United States for over 200 years. From the banks of the Hudson to the heart of the American industrial revolution, American industry has helped shape and contribute to our modern economy.
But what if America never exported its industry? What would the world look like? That’s what we explore in this blog post. Let’s look at four industries that have been left behind due to our current trade policies and ask ourselves: “If America no longer exported them, would they die out too?”
What if America No Longer Exported Manufacturing?
No matter what side of the aisle you’re on, you must admit that the American Manufacturing Council’s (AMC) assertion that “manufacturing is a job-creation engine” is true. After all, the United States remains the world’s largest exporter of goods. However, if American companies were no longer manufacturing goods, the quality and quantity of goods produced would decrease significantly.
American jobs would decrease, income would decrease, and American cities would become less vibrant. The number of manufacturing jobs in the U.S. decreased by about 9.4 per cent between 2000 and 2009. However, service jobs grew by about 28 per cent during the same time frame. If manufacturing was left behind, then where would the jobs come from? And would the drop in manufacturing job numbers be enough to offset the 9.4 per cent increase in overall employment?
We can argue that the answer to both questions is yes. After all, if America no longer had the same manufacturing jobs as it did back in 2000, then the country would have lost a lot of activity. Overall employment in the U.S. grew by about 2.6 per cent between 2000 and 2009.
What if America No Longer Exported Software?
If American software production were left behind, then the quality of software produced in the U.S. would decrease significantly. After all, the software is produced using the equipment. And if equipment manufacturers make way less profit from software than other products, then it stands to reason that the quality of software produced in the United States would be less good than that produced in other countries.
The average cost of software produced in the United States is about 10 per cent higher than that produced in Europe and the United Kingdom. However, this cost difference is slight compared to the software’s overall price. If the United States had no software industry, the average price of software produced in the country would be about the same as in Europe and the United Kingdom.
What if America No Longer Exported Oil?
If America stopped being the world’s leading oil producer, then the amount of oil that the U.S. produces would no longer be enough to meet our and other countries’ needs. If the average U.S. family didn’t buy oil in 2009, then the country would have a small oil supply available for the general population. The same could happen if the U.S. no longer exported oil.
In either scenario, the average family would have to purchase about 18.4 gallons or 7.6 gallons of diesel fuel every month to meet their own energy needs. And if everyone in the country did that, then the oil supply would stop flowing in about a year. Furthermore, the country’s roads, bridges, and other infrastructure would fall into disrepair. American cities would become less vibrant, and the country’s economic output would decrease over time.
What if America No Longer Exported Medical Devices?
If American medical device companies could not export their products, then the quality of the products they produce would decrease quite a bit. After all, medical devices are produced with expensive equipment. If the equipment is made in another country, then the quality of the products produced using that equipment will likely be less good.
What if America No Longer Exported Biotech?
If America’s biotech sector could not export its products, it stands to reason that the products they produced in the country would be of lower quality than those made elsewhere. After all, biotechnology is a highly technical field, and the ability to produce sophisticated equipment for such a complicated task often translates into designing and manufacturing products in-house.
What if America No Longer Exported Telecommunications Equipment?
If the United States could not export telecommunications equipment, then it stands to reason that the quality of the exported equipment would decrease. After all, telecommunications equipment is designed to be used and therefore functions best when it is being used.
What if America No Longer Exported Consumer Electronics?
If the United States could not export consumer electronics, it stands to reason that the quality of the products made in the country would decrease. After all, electronic devices are made to be used. They do not function well when left unused.
Farms and fields across the United States have been on the receiving end of a trade war with China. The result? Record-low commodity prices and millions of farmers across the country are in jeopardy of losing their farms to foreign competition. If American agriculture never developed a competitive edge due to trade, the demand for U.S. agricultural products would plummet, and the rural communities that depend on it would vanish.
Every American must understand how our trade policies affect their community. If you want to improve your understanding of how our trade policies hurt our farmers, start by visiting a farm in your neighbourhood. You’ll see first-hand how our current trade policies are hurting American agriculture.
Textiles & Other Apparel Industry
The manufacturing sector has always been a critical driver of the U.S. economy, but it now accounts for just 9.1% of our GDP. That means that a vast portion of the country’s economic activity is being replaced by foreign competition. If American manufacturing could not compete against low-cost Asian brands, the entire global industry would face immense disruption.
Thankfully, that’s not happening. American companies are finding new ways to compete in the changing global market, and the number of American corporate offices worldwide is rising. If American manufacturing were left behind in this scenario, it would be curtains for the region’s oldest manufacturing industry.
Health Care Industry
Like textiles and apparel, health care is another industry where American manufacturing has found competing in a globalised world challenging. But if the administration’s trade policies continued, we could easily see more outsourcing of medical services as a result. American hospitals are increasingly outsourcing services to other countries due to international competition in health care.
If we banned importing products requiring hospitalisation, our entire health care industry would implode. Thankfully, this isn’t happening. American health care is still a world leader, and we’ve been playing catch-up for some time. We remain one of the most-traded nations in the world, and our health care system has done remarkably well given the changes that have taken place over the past century.
Natural Resources Industry
The oil and gas industry is a bedrock industry of the American economy. It employs more people than the mining industry, and its products account for about a quarter of all U.S. exports. But with the price of oil at $74 per barrel and the risk of increased domestic production, the future of this industry is in doubt. If the current trade dispute were to result in a trade war, then the future of this industry would be even less certain.
Even if crude oil prices stay above $80 per barrel, it will be difficult for the industry to remain viable without American imports. If American natural resources were left behind in this scenario, it would threaten national security and slow economic growth.
Software Development Stops
One of the oldest software development industries in the world, software development has found it challenging to keep up with the demands of a new technological age. As a result, many of the world’s leading technology companies are in the United States. If the software industry were left behind in this scenario, it would be challenging to get back to profit.
If software development were left out in the cold, it would have difficulty growing its customer base and making a profit. It’s provided critical services to the U.S. economy for decades, and it would seem odd for it to go away when the country is still trying to industrialise.
Massive Manufacturing Plants Close Their Doors
One of the most visible signs of the decline of American industry is when a significant manufacturing plant closes its doors for good. More than 100,000 manufacturing plants have closed their doors in the last decade, more than any other industry. This one’s a doozie.
That means more than 8 million jobs have been lost, which is a significant reason why the United States is currently struggling so severely with a job crisis. If the manufacturing industry were left behind in this scenario, there would be no place for auto parts, consumer electronics, pharmaceuticals, or other high-value-added products that compose the backbone of the U.S. economy.
American Services Shrink to an Economy-Wide Level
Let’s consider the case where American services are no longer a uniquely American phenomenon. For decades, the United States has been the “service” nation, with a diverse and competitive set of services industries. If American services were suddenly to vanish, it would significantly impact world trade and the global economy.
If you want proof that the trade war has hit home, consider what’s happening to the diversity of American services. It’s no secret that many service industries are under threat due to rising automation and the shift to digital services. If American services were suddenly to vanish, the entire world would lose out on many cultural, artistic, and sporting experiences that are only available through that industry.
Let’s Not Forget About America’s Last Remaining Export: Mining!
Finally, let’s consider the case where an American export is suddenly unavailable to the world market because it no longer exists. As you’re likely well aware by now, mining is one of the mainstays of the American economy. Without metal production, we would have no cellphones, laptops, or computers. If mining were to vanish from the earth, then we’d have nothing to export — apart from our oil and gas, which are currently taken into account in our trade policy.
Financial services is a highly regulated industry, and many banks and other financial institutions have been closing their doors for some time. What would happen to the asset base of these banks if mining were to stop? It would likely store the assets of these financial institutions in dozens of countries around the world, and the disruption caused by a closing factory or mine might result in a disruption in financial services.
Aerospace and Defense
As we’ve seen, the effects of a decline in American industry are far-reaching. But the situation is even more difficult for the U.S. aerospace and defence industry. Without a thriving American aerospace industry, much of the military technology that has been developed over the last 50 years would cease to be helpful. American aerospace technology is arguably at the top of its game, and the loss of that industry would significantly impact the world.
It is important to remember that trade deals benefit both countries. However, how trade deals are currently being negotiated could severely damage the American economy in the long run by harming American manufacturing and creating a trade deficit that will negatively impact the global economy.
In addition, the way trade deals are currently being negotiated might not be suitable for the American people. So, whether you are a Republican, Democrat, Libertarian, or something else, you should care about the direction these trade negotiations are headed.