Tariffs ignore that economic reality, leaving consumers with higher prices for basic goods and less to spend in the areas in which our economy excels, Hoffman said: Cheap goods mean “more money to save, to invest, to allocate elsewhere — we’re far better off because of access to international trade.”Deficits are not necessarily negative. “If you run a trade deficit, you’re not a loser,” Hoffman said. “We run trade deficits because we consume — our appetite for consumption is greater than our capacity to produce.”
Path of progress
As countries progress and grow wealthier, manufacturing tends to represent less of their economies, Hoffman said.
Data from Our World in Data shows that while the manufacturing output of lower-income nations around the world increased from 2004 to 2020, higher-income countries went in the opposite direction.
From cutting-edge software development to innovative financial products, knowledge economy work often offers better wages and working conditions than traditional manufacturing.Hoffman, who grew up in Michigan and witnessed manufacturing’s 1970s heyday, said that while such factory jobs were good for “their time,” they were dirty, dangerous and physically demanding.
Today’s service economy, he said, creates different but superior opportunities: “It’s less wear and tear on the body, you’re able to work longer, you’re able to earn a good living.”
