The chart below shows how real imports and real GDP per capita increased since 1947. Although manufacturing jobs declined, relatively high paying service sector jobs such as engineering, information technology, marketing, and finance have increased. Real U.S. Imports and GDP per Capita (Imports are Billions of Chained 2017 Dollars; First Quarter Annualized rate) (Source: U.S. Bureau of Economic Analysis) 1947 1980 2000 2024 Increase 1947-1980 Increase 1980-2000 Increase 2000-2024 Imports $53.9 $394.3 $1,661.9 $3,548.7 $340.4 $1,267.6 $1,886.8 GDP per Capita $15,248 $32,377 $49,335 $68,549 $17,129 $16,958 $19,214 Over the 33-year period from 1947–1980, real imports increased $340.4 billion while real GDP per capita rose $17,129. The globalization of international trade began to significantly increase in the decade of the 1980s. Over the 20-year period from 1980 - 2000, real imports and GDP per capita increased $1,267.6 billion and $16,958, respectively. The rising trend accelerated for both real imports and GDP per capita since the turn of the century. Between 2000 and 2024, imports and GDP per capita increased $1,886.8 billion and $19,214, respectively. Although globalization may have contributed to a decrease in manufacturing employment, it was also a contributing factor to increasing real GDP, and consequently, income per capita. The landscape has changed for manufacturing since the 1980s due to a variety of factors. Globalization and automation were key factors driving the reduction in manufacturing employment with increased technology and automation significantly bolstering labor productivity in the manufacturing sector. While increasing labor productivity reduces costs and prices, the increased output per labor hour can also reduce manufacturing employment. The globalization of international trade began to significantly increase in the decade of the 1980s, contributing to declining manufacturing employment as it provided greater access to low-cost sourcing options for U.S. businesses, primarily through low labor cost countries. Since the 1980s, global supply chain networks have evolved for many companies and industries. Companies can source inputs and products globally to minimize costs, maximize profits, and expand markets. The tariffs implemented in 2018, particularly for China, caused many companies (for example, Nike) to turn away from China to source from other low labor cost countries. The table below shows the changes in imports of goods with selected low labor cost countries between 2017 and 2023. Imports from China declined $77.8 billion, or 15.4%, while imports from other low labor cost countries surged as the increased tariffs caused U.S. companies to rely on resources from other countries. On a percentage increase basis, Vietnam was the big winner, with U.S. imports from Vietnam increasing 146.0% since 2017 to $114.4 billion in 2023. In terms of dollars, imports from Mexico increased the most. Between 2017 and 2023, imports rose $129.1 billion, a 37.2% increase since 2017. Global tariffs will limit sourcing options. Changes in Imports of Goods with Selected Low Labor Cost Countries (billions of dollars) (Source: U.S. Census Bureau) Country 2017 Imports 2023 Imports Change (dollars) Change (percent) China $505.0 $427.2 -$77.8 -15.4% Mexico 314.0 475.6 +129.1 +37.2 Vietnam 46.5 114.4 +67.9 +146.0 Taiwan 42.5 87.8 +45.3 +106.6 India 48.6 83.8 +35.2 +72.4
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Center for Business and Economic Insight
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