Fun Fact: the U.S. Runs a Trade Surplus in Services
That hasn’t really been part of the tariff conversation of late, but maybe it should be?
Good Morning!
Here are today’s highlights:
Even just the threat of tariffs can decimate industries and spark anti-American movements.
Lou Mosca suggests some questions you should be asking about your business.
A dispute between a pizza shop owner and some parents has gone viral in Boston.
A patient with a rare blood disorder had given up. A doctor using AI found a treatment.
INTERNATIONAL TRADE
Services account for the vast majority of jobs in the world’s wealthiest industrialized countries: “The idea that America should make more things is a seductive one. We all think of a rich and powerful country as one with huge factories belching smoke, churning out stuff, and selling it to the world. It is deeply imprinted in our minds. But it is an image of the past, not the future. The most advanced economies in the world today are almost all dominated by services. Services account for the vast majority of jobs in the world’s richest industrialized countries. In the U.S., services account for more than 80 percent of all nonfarm jobs.”
“In 1960, U.S. consumers allotted more than 50 percent of their consumption spending to goods. By 2010, it was only 33 percent. And the money for companies is not in goods but services. A sneaker might cost 25 or 30 dollars to make; the value is in the design, marketing, and sales that allows you to sell it for $100. Which part of this product would you rather your workers be involved in?”
“Japan is particularly important as a case study because it did pretty much everything that Trump wishes that the U.S. had done over the past 60 years. It protected its domestic market from foreign goods through high tariffs and other barriers. The government pursued an aggressive industrial policy, society venerated manufacturing, and the educational system prized technical skills and shop work. And yet, manufacturing declined steadily in Japan.”
“One could easily make the case that many Japanese industries declined because of these policies. Government bureaucrats favored certain sectors — such as VHS tape recorders and Walkman-style audio players — and missed the technological shifts that rendered them obsolete. Huge levels of corruption within the ruling elites ensured that firms were favored for political reasons. Most important, the tariffs and other barriers kept Japanese companies shielded from competition.”
“Those decisions and others led Japan — far from dominating the world economically as Trump had imagined in the 1980s — to enter into a decades-long stagnation that it has now barely emerged from.” READ MORE
