Shifting Out of Neutral

The United States needs a significant philosophical shift in its approach to global trade. The current global trade order is premised on the ideal of outcome-neutral, rules-based proceduralism and the desirability of minimal market interference. This commitment to neutrality and openness has failed to serve U.S. economic interests. If a philosophical outlook consistently fails to achieve the core goals that any sensible economic system should seek—goals like fiscal stability, economic security and resilience, and widespread prosperity—it is the philosophy that must change, not the goals.

Fortunately, a better principle than procedural neutrality is available for consideration. Balance, as a principle that encourages intervention when the basic objectives of economic statecraft are not achieved, is a better metric for ensuring market conditions that support fiscal responsibility, industrial competitiveness, healthy growth, and the long-term viability of U.S. trade agreements. The United States should embrace a paradigm shift in global trade policy, moving from a posture of neutrality and openness to one that insists on balance.

By recentering on balance, policymakers can re-anchor U.S. trade policy to concrete economic outcomes rather than abstract commitments to liberalization that were supposed to deliver them. Fiscal stability requires correcting persistent imbalances in U.S. trade deficits and their resulting erosion of the U.S. net foreign asset position, which, in turn, encourages wider budget deficits, asset bubbles, and increased inequality. Economic security and resilience demand strong supply chains and strategic industrial capacity rather than blind dependence on foreign producers, which will not be possible if America allows persistently imbalanced trade. Widespread prosperity hinges on productive investment and quality job creation, rather than a system that advantages asset owners at the expense of wage earners, as our current trade dynamic does. Balanced trade, in sum, is a necessary condition for sustained and shared economic success.

As President Reagan stated in 1985, “[I]f trade is not fair for all, then trade is free in name only.”¹Ronald Reagan, “Remarks at a White House Meeting With Business and Trade Leaders,” Ronald Reagan Presidential Library & Museum, September 23, 1985. Trade that is “fair for all” needs to be balanced, representing an exchange of goods for goods, rather than goods for U.S. assets. As a concrete and measurable outcome, balance offers a far more stable benchmark than either non-intervention or deference to global institutions.

Goal #1: Fiscal Stability

The United States’ massive trade imbalance portends serious threats to long-term American financial stability. To understand why requires understanding the relationship between the trade deficit and the budget deficit, and why an imbalance in the first drives an imbalance in the second. 

In 2024, the U.S. trade deficit reached $918.4 billion ($1.2 trillion for goods),²“U.S. International Trade in Goods and Services, December and Annual 2024,” U.S. Bureau of Economic Analysis and U.S. Census Bureau, February 5, 2025. while China ran a $1 trillion trade surplus.³“Merchandise trade balance in China from 2014 to 2024,” Statista, accessed December 2, 2025. Put simply, this means the United States consumes around a trillion dollars more every year than it produces, and China does the opposite. The U.S. accounted for roughly 78% of total trade deficits among advanced industrial economies in 2021, indicating that it has become the primary destination for the excess capacity of trade-surplus countries. China, by contrast, accounted for 45% of the trade surpluses that year among major surplus economies, making it an outsized global supplier. 

America’s annual budget deficit is likewise massive, reaching $1.8 trillion (6.2% of 2024 nominal GDP) in 2024, and the accumulated national debt reached $35.5 trillion (122% of 2024 nominal GDP) at the end of that year.⁴“The Latest Data on Federal Revenue, Spending, Deficit, and the National Debt,” United States Department of the Treasury, accessed November 22, 2025; International Monetary Fund, “Nominal Gross Domestic Product for United States [NGDPXDCUSA],” FRED, Federal Reserve Bank of St. Louis, accessed November 25, 2025. To consume a trillion dollars more in goods than it produces each year, the U.S. essentially purchases them on credit or through asset transfers. These transactions are reflected in foreign U.S. debt purchases, both public (Treasuries) and private (corporate bonds and debt instruments), as well as U.S. asset sales, including stocks, real estate, and intellectual property rights. These sales, and similar purchases by the United States of assets abroad, are tracked in the U.S. net international investment position, which stood at negative $26.14 trillion at the end of Q2 2025,⁵“International Investment Position,” U.S. Bureau of Economic Analysis, accessed November 22, 2025. or roughly 85.7%.⁶“GDP Update,” United States Congress Joint Economic Committee, September 25, 2025. This means that foreign investors and governments now own over $26 trillion more in U.S. assets than Americans own in foreign assets. 

Asset ownership remains a far more significant indicator of “wealth” than consumption. Consumption’s value is transient while assets accrue or generate value over time. For businesses, physical assets also reflect capacity for future production. When a nation, year after year, trades over 3% of its GDP in assets for immediate consumption, it erodes both its wealth and its ability to pay off its debts in the future. As Warren Buffett warned back in 2003, when the U.S. had a negative net foreign asset position of only $2.5 trillion, “We have, day by day, been both selling pieces of the farm and increasing the mortgage on what we still own.”⁷Warren E. Buffett, “America’s Growing Trade Deficit Is Selling the Nation Out From Under Us. Here’s a Way to Fix the Problem—And We Need to Do It Now,” Fortune, November 10, 2003.

The claims of some fiscal conservatives that trade deficits do not matter are therefore nonsensical. The dollars we use to buy exports, so the claim goes, must inevitably “make their way back to the United States.” This is true in a strict sense, but it misses the broader practical reality that the dollars “coming back” are used to purchase U.S. assets, including government debt, rather than U.S. goods. If those dollars were instead spent on U.S. goods, trade would begin to balance as domestic production rose to meet foreign demand, generating more jobs and income for U.S. workers and firms. That is not what is happening.

Purchases of U.S. assets are termed “investment,” but common sense would more accurately recognize this as U.S. “divestment.” Most Americans understand investment as something that grows a business or the domestic economy, creating potential for greater production, output, and employment in the future. In reality, of the subset of returning dollars channeled toward U.S. private markets—broadly referred to as Foreign Direct Investment (FDI)—only around 5% was directed toward greenfield investment to increase production in the United States in 2024.⁸“New Foreign Direct Investment in the United States, 2024,” U.S. Bureau of Economic Analysis, July 11, 2025. The other 95% of FDI went toward foreign acquisitions of U.S. firms. 2024 was not an unusual year; the portion of FDI directed to actual generative investment has been relatively minimal for years.

The missing conceptual link is the relationship between “investment” and ownership. Starting a business very often requires borrowing money to finance the venture. On an accounting spreadsheet, that loan will appear on the positive side of the capital account and can be presented as an “investment.” But loans need to be repaid, meaning that over time, profits from the sale of actual goods and services must rise sufficiently to cover the principal and interest on the loan, in addition to ongoing costs and wages. From the spreadsheet’s perspective, it might not matter where the money is coming from as long as expenses are covered. But from the owner’s perspective, if profits from actual sales do not rise sufficiently to repay the loan, he will quickly see either his credit score diminish (limiting his potential for future loans), his ownership stake in the company diminish, or the entire enterprise go bankrupt.

In a trade context, foreign acquisitions might still benefit certain U.S. asset owners, but as U.S. goods become less competitive in both foreign and domestic markets, output, employment, and wages in the United States naturally decrease. This results in less savings, higher debts, and greater government transfer payments to workers formerly engaged in productive work.⁹Michael McNair, “The Sovereign Wealth Effect: America’s New Tool for Rebalancing the Global Trading System,” Medium, February 13, 2025. So when foreign investment rises as national savings decline, “investment” does not increase on net. Foreign saving replaces domestic saving rather than increasing it. In such scenarios, assets are transferred from U.S. entities to foreign entities, as in the case of an acquisition or foreign purchase of U.S. securities. 

Likewise, if the U.S. were capital-constrained, foreign capital inflows could help stimulate economic growth. Such was the case after the Civil War, when the U.S. had to rely on foreign capital to finance railroads and other infrastructure during the Second Industrial Revolution.¹⁰McNair, “The Sovereign Wealth Effect.” This was also the case in Europe after World War II, when Europe relied on U.S. capital investments to rebuild.¹¹Michael Pettis, “Actually, Americans Don’t Spend Too Much,” Bloomberg, May 8, 2017. But the problem now is a deficit of opportunity for profitable investment at current demand,¹²McNair, “The Sovereign Wealth Effect.” not a lack of capital. One reason for this is the economic strategy of surplus nations, such as China, which deliberately suppresses domestic consumption to gain global market share. When China’s demand for goods and services doesn’t rise with its increased production, and China’s increased production draws more U.S. demand abroad, there is less demand for U.S. goods in both economies and therefore less demand for productive U.S. investment on U.S soil.¹³While U.S. consumption accounts for approximately 68% of U.S. GDP, China’s consumption share stands at around 39%. Germany and Japan have similarly low consumption rates at around 53-54%. CEIC Data, “U.S. Private Consumption: % of GDP,” “China Private Consumption: % of GDP,” “Germany Private Consumption: % of GDP,” “Japan Private Consumption: % of GDP,” accessed November 25, 2025.

Without balanced trade, foreign investment can inflate asset bubbles and fuel instability, particularly given the near-total absence of capital controls in the U.S. market.¹⁴For a variety of strategic and economic reasons, nations as diverse as China, South Korea, Singapore, and Switzerland employ stricter controls on capital flowing into their markets. This scenario played out during the financial crisis of the 2000s after foreign purchases of mortgage-backed securities helped inflate a housing market bubble that ultimately burst, causing a global economic crisis and the most severe U.S. recession since the Great Depression.¹⁵David P. Goldman, “A Path Out of the Trade and Savings Trap,” American Affairs 1, no. 3 (2017): 31-44.

Similar to “investment,” these economic conditions raise questions about the practical meaning of “wealth.” As Michael McNair has argued, 

Rising asset prices do not inherently increase national wealth…Real wealth comes from productivity improvements, technological innovation, and enhanced infrastructure that sustainably increase income and living standards. In contrast, nominal gains from asset price inflation, whether in stocks, real estate, or other financial assets, often represent speculative value that doesn’t expand the economy’s productive capabilities [and mask wealth transfers].

When asset prices rise without corresponding productivity growth, the gains for sellers come at the expense of buyers…stock market surges driven by speculation rather than genuine corporate innovation or earnings growth simply redistribute wealth from late investors to early sellers.

…when foreign investors own domestic assets…rising asset prices can actually transfer wealth abroad when profits are repatriated, draining purchasing power from the local economy. Furthermore, while borrowing against inflated assets might temporarily boost spending, this creates financial fragility if incomes don’t rise due to stagnant productivity.¹⁶McNair, “The Sovereign Wealth Effect.”

Within the United States, asset holders have benefited from consistent demand for U.S. assets by surplus nations, which has driven asset valuations higher. This incentive structure has led many companies to hoard cash or buy back stock over the last few decades, rather than invest in production upgrades, research, or new facilities.¹⁷Oren Cass, The Corporate Erosion of Capitalism (Washington, D.C.: American Compass 2021), 1-7; “Rubio Releases Report on Domestic Investment,” United States Senate Committee on Small Business and Entrepreneurship, May 15, 2019. The pursuit of shareholder profits has also driven U.S. production abroad in pursuit of cheap labor and foreign subsidies to increase margins. In return, these corporations have frequently transferred hard-won technology and skillsets to U.S. competitors, often undermining the purpose of government-funded research and training. Over time, this system has eroded U.S. competitiveness, exacerbated inequality, and fueled political tensions. Forcing trade and capital flows back into balance will require American companies to once again profit from productive domestic investment that benefits the wider nation.

Trade imbalances thus have fiscal implications.¹⁸Mark A. DiPlacido, Fiscal Conservatives Should Care About Trade Deficits, American Compass, June 3, 2024. America is financing its budget deficit in large part through the sale of assets (like Treasury debt) to finance its massive trade deficit, actively undermining the long-term foundations of American economic prosperity in the process. After decades of rampant deficit spending and neglect of rising competition from U.S. trading partners, U.S. policymakers have begun to undermine both U.S. credibility and the nation’s ability to pay off its debts in the future.¹⁹Mark A. DiPlacido, “Gross Domestic Problems,” Commonplace, June 19, 2025. China also faces debt problems. China’s debt-to-GDP ratio has increased by 48% over the past five years and accounts for more than half of the global increase in debt-to-GDP since 2008. Michael Pettis, The Relationship Between Chinese Debt and China’s Trade Surplus, (Carnegie China, 2025); Michael Pettis, “China’s Debt Isn’t the Problem,” Financial Times, December 20, 2023. Rather than continue to attempt to drive growth through excessive investment, China should allow consumption to rise to a level where the production of its goods does not heavily outstrip domestic consumption. It should also allow its currency to appreciate so that its exports do not outpace imports by $1 trillion annually. Put more simply, China should allow wages to rise so that Chinese consumers can purchase more of what they produce, rather than continuing to appropriate Chinese wages and savings to fund additional infrastructure projects, capital investments, and industrial subsidies aimed at expanding sales in foreign nations. Annual interest payments on U.S. federal debt now exceed defense spending and Medicare, and risk climbing even further if interest rates remain high.²⁰“Interest Costs Surpass National Defense and Medicare Spending,” House Budget Committee, May 16, 2024. In May 2025, the last of the three leading credit agencies downgraded the U.S. bond rating.²¹Davide Barbuscia & Pushkala Aripaka, “Moody’s Cuts America’s Pristine Credit Rating, Citing Rising Debt,” Reuters, May 17, 2025. Continued deficit spending risks greater instability, as it drives inflation and undermines the credibility of a currency backed by trust.

Given the yawning budget deficit and political reticence to cut spending or raise taxes, revenue from new trade and capital flow policies can, of course, help. In FY24, tariffs generated approximately $77 billion²²“How Much Revenue Does the Federal Government Collect from Tariffs?,” USAFacts, accessed November 23, 2025. in federal revenue out of total revenue of around $4.92 trillion.²³The U.S. Department of the Treasury, “The Latest Data on Federal Revenue, Spending, Deficit, and the National Debt,” accessed November 23, 2025. Even accounting for the increase in monthly tariff revenue in 2025—from roughly $9 billion in January to $31 billion in September,²⁴Amanda Macias, “Back-to-back Highs: August and September Bring in $62.6B in Tariff Revenue,” Fox Business, October 1, 2025. which suggests that FY26 could bring in upwards of $372 billion if revenue remains constant—this would account for only about 7% of federal revenue, though. Tariffs alone cannot replace the current tax regime without major structural spending cuts that neither party has proposed. With that said, a 10% global tariff or a 10% market access charge on foreign capital inflows would likely generate $2.2 trillion in additional revenue over a ten-year budget window.²⁵Phillip L. Swagel to Chuck Schumer, Sheldon Whitehouse, and Ron Wyden, Congressional Budget Office memorandum, Effects of Illustrative Policies That Would Increase Tariffs, December 18, 2024; Implement a 10% Global Tariff, American Compass, February 11, 2025. This additional revenue could help offset the current U.S. budget deficit. 

A nation’s debts represent a claim on its goods and services at some point in the future. If U.S. production is not rising in tandem with the valuation of dollar-denominated assets, demand for those dollars and assets will eventually begin to decline. Put another way, American financial assets like Treasury bonds represent a kind of “deferred consumption” on the part of foreign purchasers—a claim on the output of future American production.²⁶Michael McNair, “Of Trade and Capital: A Tale of Two Strategies,” Commonplace, May 13, 2025. Rather than defer consumption to a later date, policymakers should instead pressure foreign nations to purchase those U.S. goods and services in the present.²⁷McNair, “Of Trade and Capital.”

Policymakers should aim to reduce U.S. reliance on foreign capital flows and accompanying U.S. asset inflation. More explicit distinctions should be drawn between productive greenfield investment and asset purchases in economic discussions, especially when discussing foreign investment. As demand shifts from American assets purchased on Wall Street to American goods produced on Main Street, increased foreign demand and domestic investment will translate into higher output and incomes, facilitating greater household savings to build assets and real wealth.²⁸Michael Pettis, “Do Consumers Benefit from Cheaper Imports?,” Financial Times, August 13, 2025. Higher wages will pull more Americans off the sidelines of the economy, decreasing demand for government spending and services. If this readjustment is pursued wisely, more balanced trade and capital accounts could allow GDP to rise faster than asset valuations, rather than seeing asset prices collapse as foreign nations withdraw their investments. A controlled burn of “investment” detritus would be far preferable to a hydrogen-bubble-fueled wildfire caused by continued negligence and a future panic.

Goal #2: Economic Security and Resilience

Imbalanced trade has resulted in critical vulnerabilities in U.S. economic and national security. Sustained trade deficits have hollowed out American industrial production with negative consequences for productivity, technological competitiveness, and innovative dynamism. These objectives all require a thriving industrial base. As nations like China have aggressively pursued technological dominance, the U.S. has also begun to experience dangerous supply chain dependencies in a range of critical sectors, and its balance of power relative to China has shifted ominously in China’s direction. Objections to “starting a trade war” ignore that the United States is already in one, and that restoring balanced trade is a better guarantor of U.S. security interests than continued deference to international bodies like the World Trade Organization. The United States cannot continue to undermine its economic security by tolerating industrial weakness.

U.S. manufacturing competitiveness is deteriorating. U.S. global share of manufacturing dropped from 25% in 2000 to 17% in 2023 and is projected to fall to 11% by 2030. China’s share has risen from 6% in 2000 to 29% in 2023 and is projected to rise to 45% by 2030.²⁹The Future of Industrialization: Building Future-Ready Industries to Turn Challenges into Sustainable Solutions (Vienna, Austria: United Nations Industrial Development Organization), 17. For 2023 figures, see Felix Richter, “China Is the World’s Manufacturing Superpower,” Statista, April 16, 2025. When many economists and leaders were advocating for further expansion of the free trade paradigm in the 1990s and early 2000s, they argued the U.S. would only lose low-value industries, but America’s trade deficit in advanced technology³⁰“Trade in Goods with Advanced Technology Products,” United States Census Bureau, accessed November 23, 2025. has risen alongside its broader deficit from a $38 billion surplus in 1991 to a nearly $300 billion deficit last year. In fact, the U.S. trade advantage in capital goods and high-tech goods declined more rapidly than in any other goods categories during the 1990s and 2000s, shrinking as a portion of overall U.S. manufacturing exports from 30% in 2007 to 24% in 2024 (though the trend has recovered from a low of 18% in 2018).³¹“High-technology exports (% of manufactured exports) – United States,” World Bank Group, accessed November 25, 2025.

It is not a coincidence that these statistical disasters date from this period. Admitting China into the WTO and granting it Permanent Normal Trade Relations with the United States at the turn of the century prompted American manufacturing to accelerate offshore, on the assumption that American innovation could be sustainably divorced from American production. This loss of the industrial output has instead eroded the U.S. capacity for innovation while advantaging surplus countries. This is because innovation most often occurs where production takes place.³²Dan Wang, “How Technology Grows (a Restatement of Definite Optimism),” Dan Wang, July 24, 2018. It also often occurs in market segments that aren’t always strategically obvious. Using batteries as an example, Andy Grove illustrated this market tendency in a 2010 article for Bloomberg: 

…A new industry needs an effective ecosystem in which technology know-how accumulates, experience builds on experience, and close relationships develop between supplier and customer. The U.S. lost its lead in batteries 30 years ago when it stopped making consumer electronics devices. Whoever made batteries then gained the exposure and relationships needed to learn to supply batteries for the more demanding laptop PC market, and after that, for the even more demanding automobile market. U.S. companies did not participate in the first phase and consequently were not in the running for all that followed. I doubt they will ever catch up.³³Andy Grove, “How America Can Create Jobs,” Bloomberg, July 1, 2010.

As industry has declined in the United States, skills have atrophied³⁴Christopher O’Dea, “The New Math for Manufacturers,” (Los Angeles: Korn/Ferry, 2013), 37-38. and top talent is now drawn to service sectors like finance rather than STEM fields.³⁵Jude Blanchette and Ryan Hass (Hosts), Vying for Talent, podcast transcript, “Can Semiconductor Manufacturing Return to the US?,” Brookings Institution and Center for Strategic and International Studies, April 14, 2022, 7. Between 1990 and 2008, only 625,000 of the 27 million new jobs were in the tradable sector (2.2%).³⁶Michael Spence, “Growth in the Post-Crisis World,” International Monetary Fund, accessed November 23, 2025; Michael Spence, “Growth in the Postcrisis World,” in In the Wake of the Crisis: Leading Economists Reassess Economic Policy, edited by Olivier J. Blanchard, David Romer, A. Michael Spence, and Joseph E. Stiglitz (International Monetary Fund, 2012), 182. The Center for New American Security projects that the U.S. will need 300,000 more engineers and 90,000 more skilled technicians in the semiconductor industry alone by 2030, and that as many as half of the U.S. mineworkers will retire by 2029.³⁷Sam Howell, Technology Competition: A Battle for Brains, Center for New American Security, July 24, 2023. The Naval Sea Systems Command projects a similar shortage of 100,000 workers needed to meet the Navy’s submarine procurement goals.³⁸Alexander Grey, “The Submarine Workforce Crisis: Admitting Realities and Restructuring Long-Term Strategy,” War On the Rocks, April 4, 2024. As productive knowledge atrophies, so does the potential for future production.³⁹Ricardo Hausmann, César A. Hidalgo, Sebastián Bustos, Michele Coscia, and Alexander Simoes, “Why is Economic Complexity Important,” The Atlas of Economic Complexity: Mapping Paths to Prosperity, (Cambridge: MIT Press, 2014), 26-33. In short, the “innovate here, produce there” model has failed, leaving American advances and breakthroughs on the abandoned factory floor.

It is therefore not surprising that the United States is losing its technological edge. A report from the Australian Strategic Policy Institute found that in 2024, 57 out of 64 critical technology categories were dominated by China compared to three out of 64 in 2003.⁴⁰Jennifer Wong Leung, Stephan Robin, and Danielle Cave, ASPI’s Two-decade Critical Technology Tracker: The Rewards of Long-Term Research Investment (Canberra: Australian Strategic Policy Institute, 2024), 4. The U.S. led in 60 of those categories as recently as 2007, but now leads in only seven. Rather than the U.S. sacrificing more basic manufacturing capacity for high-value technological superiority, the US has lost both. Current policy provides few incentives for U.S. companies to change this trajectory. From 2003 to 2017, U.S. multinational firms increased research and development funding in China by an average of 13.6% annually, while increasing the same funding by just 5% annually in the United States.⁴¹Kaj Malden and Ann Listerud, Trends in U.S. Multinational Enterprise Activity in China, 2000-2017, U.S.-China Economic and Security Review Commission, July 1, 2020, 12.

This loss of industrial capacity and degradation of technological and innovation leadership that has occurred alongside that loss have made the United States and its allies more reliant on adversarial nations for essential goods and services. This was made plain during the COVID-19 pandemic when the United States found itself immediately dependent upon China for personal protective equipment, ventilators, and basic medicines. Later, broader supply chain disruptions caused wider shortages and longer wait times, helping drive price increases and inflation. This exposure extends to the defense sector, where one interagency task force identified 280 vulnerabilities in U.S. defense supply chains.⁴²Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States, U.S. Department of Defense, September 2018, 3. Since 2000, the report said, the entire defense industrial base has shed more than 20,500 U.S.-based manufacturing firms (along with many more jobs).⁴³Arthur Herman, “America Needs an Industrial Policy,” American Affairs 3, No. 4 (2019): 3-28. The CEO of Raytheon, one of the five major U.S. defense contractors, recently stated that decoupling from China would be “impossible.”⁴⁴Sylvia Pfeifer, “‘We Can De-Risk but Not Decouple’ from China, Says Raytheon Chief,” Financial Times, June 19, 2023.

China, meanwhile, now dominates many key sectors of the twenty-first century economy. Shipbuilding⁴⁵Mark A. DiPlacido, Bringing Back America’s Shipbuilding Capacity, American Compass, March 25, 2025. is a key example: China’s share of world tonnage capacity surging from 5% in 1999 to over 50% in 2023.⁴⁶Nik Martin, “US Strikes Back at China’s Maritime Trade with Port Fee,” Deutsche Welle, March 10, 2025. China has over 200 times the surface warship and submarine shipbuilding capacity of the United States.⁴⁷Joseph Trevithick, “Alarming Navy Intel Slide Warns Of China’s 200 Times Greater Shipbuilding Capacity,” The War Zone, July 11, 2023. China builds more ships in one year than the United States has built in total since the end of World War II.⁴⁸Matthew Funaiole, Brian Hart, and Aidan Powers-Riggs, Hill Brief: Confronting China’s Dual-Use Shipbuilding Ecosystem, Center for Strategic and International Studies, March 3, 2025. This is not by accident or due to any natural advantage China has in shipbuilding; it is the result of a deliberate decision by China’s government to support the industry. A recent study estimated that China’s shipbuilding industry would operate at an 82% loss without government support.⁴⁹“Industrial Policy: Lessons from Shipbuilding,” Global Business & Finance Magazine, November 5, 2024.

Additional industries in which China now dominates global market share include legacy semiconductors (47% by 2027),⁵⁰Sunny Cheung, “Encircling the West: The PRC Gains Ground in Legacy Chips,” Jamestown, May 16, 2025. commercial drones (80%),⁵¹Aosheng Pusztaszeri, Why China’s UAV Supply Chain Restrictions Weaken Ukraine’s Negotiating Power, Center for Strategic and International Studies, December 16, 2024. rare earths and critical mineral mining and refining (61% and 92%),⁵²Ayeshea Perera, “Why the US Needs China’s Rare Earths,” BBC, October 16, 2025. steel (53%)⁵³“World Steel in Figures 2025,” World Steel Association, accessed November 23, 2025. and aluminum (60%),⁵⁴Melissa Pistilli, “Top 10 Aluminum-producing Countries,” Investing News Network, February 13, 2025. batteries (including nearly 100% for refining of graphite for anodes),⁵⁵Eri Silva, “North American Graphite Market to Disconnect from Chinese Prices,” S&P Global, August 15, 2023. active pharmaceutical inputs (45-90%),⁵⁶Ben Noon, Breaking China’s Pharma Death Grip, American Compass, November 26, 2024. EVs (62%),⁵⁷Bruno Venditti, “Visualizing Chinese EV Market Share Overseas,” Visual Capitalist, February 28, 2025. auto parts,⁵⁸“The Growing Threat of Chinese Aftermarket Auto Parts in the U.S.,” Emerging Strategy, March 6, 2025. LCDs (72%),⁵⁹Stephen Ezell, How Innovative Is China in the Display Industry?, Information Technology and Innovation Foundation, September 2024. shipping cranes (80% in operation)⁶⁰Handling Our Cargo: How the People’s Republic of China Invests Strategically in the U.S. Maritime Industry, House Select Committee on the CCP and the House Committee on Homeland Security, September 2024, 4. and shipping containers (95%),⁶¹Inga Fechner, Rico Luman, and Lynn Song, “U.S. Attempts to Curb China’s Dominance in Shipping, but Actions Could Backfire,” ING, February 24, 2025. and certain pesticides.⁶²Yue Zhao and Sarah Rogers, “Tracing China’s Agrochemical Complex,” World Development 181 (2024): 1.

China’s manufacturing capacity is now larger than that of the United States, Europe, and Japan combined.⁶³Richard Baldwin, “China Is the World’s Sole Manufacturing Superpower: A Line Sketch of the Rise,” VoxEU, January 17, 2024. In just three years, between 2020 and 2022, China went from being a net importer of cars to being the world’s largest exporter. That same year, China’s manufacturing surplus surpassed 1.7% of total world GDP and over 10% of China’s GDP—up from 6% of China’s GDP in 2018,⁶⁴Brad Setser, “The Dangerous Myth of Deglobalization,” Foreign Affairs, June 4, 2024. See also Brad Setser, Michael Weiland, and Volkmar Baur, “China’s Record Manufacturing Surplus,” Council on Foreign Relations, March 10, 2024. and larger than the record U.S. manufacturing surpluses (6% and 4% of GDP) after World War I and World War II.⁶⁵Brian Reinbold and Yi Wen, “Historical U.S. Trade Deficits,” Federal Reserve Bank of St. Louis, March 17, 2019. Despite facing higher U.S. tariffs since 2018, China’s exports are still growing at more than three times the rate of global trade.⁶⁶Brad Setser and Michael Weilandt, “China’s Stunning 2024 Export Growth,” Council on Foreign Relations, December 17, 2024.

This lopsided shift in industrial strength, driven in large part by sustained trade imbalances, has geopolitical and economic consequences. The United States has become less competitive in the world market. In 1999, China’s exports amounted to only one-tenth of U.S. exports by value.⁶⁷Justin Lahart, “How the U.S. Lost Its Place as the World’s Manufacturing Powerhouse,” Wall Street Journal, April 13, 2025. By 2008, China had surpassed the U.S. and become the world’s largest exporter. According to the Lowy Institute, China was the largest bilateral trading partner for 60 countries in 2023, compared to 33 for the United States.⁶⁸Roland Rajah and Ahmed Albayrak, China Versus America on Global Trade (Sydney: Lowy Institute, 2025), 8. In total, nearly 70% of the world’s economies (145) now trade more with China than with the United States, with 112 trading at volumes twice as high, compared to 80% of nations trading more with the United States before China was admitted to the WTO in 2001. Of course, much of this trade is comprised of Chinese exports, which grew by roughly $1 trillion (40%) between 2019 and 2022 alone, increasing its global trade surplus from $430 billion in 2019 to nearly $1 trillion last year. The United States, in contrast, runs a $1 trillion total trade deficit, absorbing surplus output from the rest of the world.⁶⁹Edith M. Lederer, “China and the US Clash at the UN Over the Panama Canal, a Focus of Trump’s Attention,” AP News, August 11, 2025. It is worth noting that trade and capital imbalances have also resulted in the United States becoming a net divestor of foreign assets while China has become a major buyer. This has fostered an environment that saw U.S. leaders shrug when China purchased the strategic ports on both sides of the Panama Canal, once funded and built by the United States. America’s open capital markets also allowed China to make investments in port infrastructure on its own shores, including in Los Angeles and Seattle, in addition to more than 100 other ports around the world where it has been able to install its LOGINK ship-tracking software. Bing X, “Calls grow for US to Counter Chinese Control, Influence in Western Ports,” Radio Free Asia, February 13, 2025; Andre Wheeler, “China’s Logink Platform as an Economic Weapon?,” Asia Power Watch, April 22, 2024. China’s massive trade surpluses allow it to fund such acquisitions, further entrenching its position in the global market.

This is not sustainable. The United States will not restore industrial capacity and innovative dynamism—or the supply chain independence, global technological leadership, and geopolitical strength that rely on them—without rejecting the failed model of global trade that tolerates large, persistent imbalances. Technological and industrial strength are requisite conditions for economic security, and balanced trade is a requisite condition of durable, long-term technological and industrial strength.

Goal #3: Widespread Prosperity

As trade deficits have eroded the U.S. industrial base and driven up the national budget deficit, they have also eroded widespread economic opportunities for its citizens to achieve the middle-class security they say they want.⁷⁰The American Wake-Up Call, American Compass, October 24, 2024. Two dynamics merit examination: how imbalanced trade drives deindustrialization, which has disproportionately harmed working- and middle-class Americans, and how it exacerbates the widening inequality in economic outcomes among working Americans.⁷¹The American Condition, American Compass, 2023.

Deindustrialization

While automation and the services sector began displacing manufacturing before 2000, the pace of manufacturing job losses accelerated after China’s admission to the WTO in 2001. This trend was famously termed the “China Shock” by economists David Autor, David Dorn, and Gordon Hanson.⁷²David H. Autor, David Dorn, and Gordan H. Hanson, “The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade,” Annual Review of Economics 8 (2016): 205-240. During the years following China’s accession to the WTO, the United States saw four million manufacturing jobs eliminated on net and 90,000 factories closed. More recent updates to these findings suggest that the service jobs that replaced many manufacturing jobs in cities and towns across America’s interior were of significantly lesser quality, offering lower pay,⁷³The China Shock and Its Enduring Effects (Stanford: Center on China’s Economy and Institutions, 2022). less regular hours, lower social status, and fewer benefits.⁷⁴American Compass Podcast, “After the Factories Left with David Autor,” YouTube video, March 28, 2025.

This led many manufacturing workers to drop out of the workforce altogether.⁷⁵David Autor, David Dorn, and Gordon Hanson, “On the Persistence of the China Shock,” Brookings Papers on Economic Activity (Fall 2021): 381. In 2022, 11.4% of prime-age men were not participating in the labor force, compared with only 5.8% in 1976.⁷⁶Leila Bengali and Evgeniya Duzhak, “Men’s Falling Labor Force Participation Across Generations,” Federal Reserve Bank of San Francisco: FRBSF Economic Letter, October 10, 2023. Labor force participation among younger Americans aged 16-24 has also seen a precipitous drop from 77.5% in 1989 to 60.4% in 2024.⁷⁷“Youth Labor Force Participation Rate at 60.4 Percent in July 2024,” U.S. Bureau of Labor Statistics (BLS), September 3, 2024. This drop has been most severe among young men, whose participation declined 21.6% since 1989.⁷⁸The Bureau of Labor Statistics, “Youth Labor Force Participation Rate at 60.4 Percent in July 2024,” September 3, 2024. Excluding the COVID-19 pandemic, the overall labor force participation rate is at its lowest level since the late 1970s.⁷⁹“Labor Force Participation Rate (CIVPART),” FRED, accessed November 23, 2025. Compounding the social costs of unemployment, the “China Shock” also increased premature male mortality and child poverty while decreasing marriage rates and fertility. ⁸⁰David Autor, David Dorn, and Gordon Hanson, How the China Trade Shock Impacted U.S. Manufacturing Workers and Labor Markets, and the Consequences for U.S. Politics, Washington Center for Equitable Growth, May 13, 2025.

General economic indicators have also begun to flag in recent decades. Industrial production declined⁸¹Where’s the Growth, American Compass, March 2022, 3. by 10% from 2000 to 2020 (excluding inflated gains from computer processing) after nearly doubling from 1980 to 2000, and remains significantly below its level before the Great Recession in 2008.⁸²“Industrial Production: Manufacturing (NAICS) (IPMAN),” FRED, accessed November 23, 2025. Manufacturing productivity is also lower today than it was 15 years ago, meaning it takes more hours to produce the same amount of manufactured goods produced in 2010.⁸³“Manufacturing Sector: Labor Productivity (Output per Hour) for All Workers (OPHMFG),” FRED, accessed November 23, 2025. These are alarming indicators for an advanced economy.

Manufacturing employment in the United States has declined both in aggregate and as a share of total employment since 2000.¹⁰⁷Economists cite a variety of numbers concerning manufacturing jobs, including aggregate manufacturing job numbers, manufacturing jobs as a percentage of total employment, total manufacturing output, and manufacturing as a percentage of GDP. When discussing these numbers, it is more illuminating to track them both over time and in relation to other developed nations. While manufacturing output increased in aggregate, it fell significantly as a percentage of U.S. GDP and as a share of world manufacturing output. Other advanced economies have also seen declines in both the absolute and percentage shares of total jobs in manufacturing, but Germany and Japan still employ nearly twice the share of their populations in manufacturing, while China’s share is almost triple that of the United States. 

Many also argue that, due to automation, manufacturing jobs will never return to the levels seen in the mid-twentieth century, when they accounted for roughly 35%¹⁰⁸Justin Lahart, “How the U.S. Lost Its Place as the World’s Manufacturing Powerhouse,” Wall Street Journal, April 13, 2025. of private sector employment. It is true that the share of jobs in manufacturing usually declines over time in developed economies, as manufacturing offers enormous opportunities for productivity gains through automation; however, this does not typically necessitate significant net drop-offs in manufacturing jobs. The number of U.S. manufacturing jobs remained relatively steady in the decades leading up to 2000.¹⁰⁹FRED, “All Employees, Manufacturing (MANEMP).” If the U.S. had had balanced trade since 2000 (i.e., if manufacturing output had grown at the same rate as domestic demand for manufactured goods), the United States would still need a similar number of jobs in that sector. The U.S. goods trade deficit indicates that meaningful increases in manufacturing employment are still possible, and that reshored factories could employ more Americans than offshored ones. The question is not whether a reshored factory will produce as many jobs as it would have 25 years ago; the question is whether a reshored factory will produce more U.S. jobs than having no factory at all.

Nor is it compelling to argue that manufacturing jobs are not the “kinds of jobs we want.” A recent poll by the CATO Institute indicated that Americans feel the country would be better off if more people were employed in manufacturing by a 4:1 margin.¹¹⁰Cato Institute 2024 Trade and Globalization National Survey, Cato Institute, August 7, 2024, 6. One-quarter of those not employed in manufacturing also said they would likely be better off working in manufacturing themselves than in their current positions. Given that manufacturing currently accounts for only 8.2% of U.S. jobs and that those employed in manufacturing were excluded from the survey, the results suggest a strong interest in additional manufacturing employment opportunities. The stigma against manufacturing today is more a product of the flawed economic policies the United States has enacted over the last 30 years and the cultural divide between elites and average Americans than evidence against manufacturing’s general desirability. 

Some further argue that the U.S. services sector is a viable replacement, but the U.S. trade deficit in goods is four times larger than the U.S. surplus in services. And while some service jobs do pay significantly more than manufacturing, the service jobs available to the population that would have filled manufacturing jobs in the past—the two-thirds¹¹¹Robert E. Scott and David Cooper, Almost Two-Thirds of People in the Labor Force Do Not Have a College Degree, Economic Policy Institute, March 30, 2016. of Americans without college degrees¹¹²Increasing college attendance is not a viable solution either. For a discussion of the failed results of the U.S. “college for all” strategy, see A Guide to College-for-All, American Compass, January 19, 2022.—do not. From a trade perspective, services exports (excepting travel and tourism) rarely benefit lower-skilled workers in the U.S. economy. The bulk of service exports consists of business, consulting, tech, and financial services, as well as fees for the use of intellectual property, which primarily benefit the owners of corporations, regardless of how many U.S. citizens they employ.¹¹³Ehsan Soltani (@Soltani), “U.S. Services Exports Reach $1.11 Trillion in 2024,” Voronoi, May 14, 2025.

Manufacturers also contribute substantially to U.S. services exports.¹¹⁴Oren Cass, “Fareed Zakaria Has No Idea What He’s Talking About,” Commonplace, March 29, 2025. According to a 2024 report by the Council of Economic Advisors, “Manufacturers are the second largest exporter of digitally-enabled services after the finance and insurance sector… [and] account for 54 percent of overall industrial R&D which is a key input into goods production as well as service solutions that enhance the performance of manufactured goods.”¹¹⁵“What Drives the U.S. Services Trade Surplus? Growth in Digitally-Enabled Services Exports,” Council of Economic Advisors, June 10, 2024. Overall, despite currently accounting for only around 10% of GDP, the manufacturing sector contributes one-fifth of capital investment, over one-third of productivity gains, and 70% of business research and development spending.¹¹⁶Jamieson Greer, “Remarks at the Reindustrialize Summit in Detroit, Michigan,” Office of the United States Trade Representative, July 16, 2025.

Employment growth in manufacturing spills over into other sectors. According to a March 2025 report by the United Nations Industrial Development Organization, manufacturing industries have the most significant potential to generate employment, creating 2.2 jobs in other sectors for every job they create directly, a multiplier effect that “doubles that of the non-manufacturing industry and is three times higher than the average multiplier of modern services.”¹¹⁷Alejandro Lavopa and Federico Riccio, The Multiplier Effect of Industrial Jobs (Vienna, Austria: United Nations Industrial Development Organization, 2025), Abstract. Another study by the Economic Policy Institute found that durable manufacturing jobs have an even higher 7.4 multiplier effect on jobs further downstream in the economy, compared to 1.2 for retail trade jobs.¹¹⁸Josh Bivens, Updated Employment Multipliers for the U.S. Economy, Economic Policy Institute, January 23, 2019. From a regional perspective, this is the goal: not manufacturing jobs alone, but the economic engine that productive activity offers the whole economic ecosystem.

Inequality 

The rampant rise in inequality over the past 50 years has exacerbated regional and political divides. As industry has declined and average wages for production and nonsupervisory workers have remained flat, labor productivity (+141%), corporate profits (+185%), and GDP per capita (+134%) have all increased significantly.¹¹⁹A Guide to Labor Supply, American Compass, May 4, 2023. Open capital and trade flows in an unbalanced global economy worsen this dynamic.¹²⁰Compared to the post-World War II economy, what benefits the profits of the biggest U.S. companies today often does not benefit the wider nation in the same way. Perhaps companies’ broader incentives to offshore production while focusing on brand building have convinced many that a model that currently works for multinational corporations will also work for a nation. Mark A. DiPlacido, “Make American Companies American Again,” Commonplace, October 16, 2025. While not a direct comparison, U.S. exports are equivalent to only 8% of U.S. GDP, whereas foreign sales account for 41% of revenues generated by S&P 500 companies. Torsten Sløk, “The Problem with the Current S&P 500 Narrative,”Apollo Academy: The Daily Spark, January 12, 2025.

As explained above, when other countries trade with the United States, they can either use dollars earned from the sale of their exports to purchase U.S. goods and services in return, or buy U.S. assets. When the U.S. runs large trade deficits, those dollars are disproportionately used toward the latter. When private sector assets are purchased (e.g., stocks, corporate shares, intellectual property rights, real estate, etc.), those who sell, those who still hold stakes, and those who aid in processing the transaction all benefit, regardless of who the buyer is. The seller of a stock or of a private company makes the same profit regardless of whether he sells his shares or company to an American or a Chinese citizen. Other shareholders and owners of real estate may see valuations rise as foreign demand for U.S. stocks and real estate puts upward pressure on the market. The financial industry, which takes a cut of each successful transaction, similarly benefits regardless of who buys and sells and pays a lower tax rate on those profits as carried interest.

The story is far different for the average worker, whose wealth is more closely tied to his immediate wages and benefits than the value of his assets. When a company is sold, the future of those wages and benefits is far less certain than the sum paid to the previous company’s owners. Shareholders may also demand greater cuts to labor and capital costs to boost profits, earning executives larger bonuses (often also in the form of stock options).¹²¹Andrew Smithers, “Investment, Productivity, and the Bonus Culture,” American Affairs 4, No. 2 (2020): 18-31. The average worker is also more likely to have debt than assets, meaning some of their income is also going to the financial industry in the form of interest payments.

As Treasury Secretary Scott Bessent recently summarized:

“The top 10% of Americans own 88% of the equities… The next 40% owns 12% of the stock market. The bottom 50% has debt. They have credit card bills, they rent their homes, they have auto loans… [In the] summer of 2024, Americans took more European vacations than they had in history…[and more] were using food banks than they ever have in history.”¹²²“ICYMI: Secretary Scott Bessent’s Interview with Tucker Carlson,” U.S. Department of the Treasury, April 7, 2025.

That growth in wealth continues to concentrate further up the income distribution.¹²³A Guide to Economic Inequality, American Compass, April 27, 2021. The Wall Street Journal recently reported that the top 19 households alone increased their wealth by $1 trillion in 2024.¹²⁴Juliet Chung, “$1 Trillion of Wealth Was Created for the 19 Richest U.S. Households Last Year,” Wall Street Journal, April 23, 2025.

The United States has a two-track economy: one primarily composed of individuals who earn a four-year degree and enter the professional services sector—often in major coastal cities at major corporations and institutions—and those who do not. These two groups now face radically different life outcomes. A recent study found that Americans without a college degree now live on average 8.5 years fewer than those with degrees.¹²⁵Anne Case and Angus Deaton, “Accounting for the Widening Mortality Gap between American Adults with and without a BA,” Brookings Papers on Economic Activity (Fall 2023): 10-11. This reflects, in part, a massive increase in U.S. “deaths of despair,” a collective term for deaths caused by suicide and alcohol and drug abuse.¹²⁶Anne Case and Angus Deaton, “Deaths of Despair Redux: A Response to Christopher Ruhm,” January 8, 2018. Those numbers now exceed 200,000 annually,¹²⁷Rhea Farberman, “Pain in the Nation 2024: the Epidemics of Alcohol, Drug, and Suicide Deaths,” Trust for America’s Health, July 31, 2024. enough to have lowered the overall U.S. life expectancy¹²⁸Mark S. Gold, “The Role of Alcohol, Drugs, and Deaths of Despair in the U.S.’s Falling Life Expectancy,” Missouri Medicine 117, No. 2: 99-101. during peacetime. The rate of these deaths in the United States is now comparable to deaths from alcohol abuse in Russia after the collapse of the Soviet Union.¹²⁹Compare: Statista, “Number of deaths caused by alcohol use disorders in Russia from 1990 to 2019,” 2020; Merianne R. Spencer, Matthew Garnet, and Arialdi Minino, “Drug Overdose Deaths in the United States, 2002-2022,” NCHS Data Brief, No. 491, (Hyattsville, MD: National Center for Health Statistics, March 2024).

Unrestricted foreign purchases of U.S. assets help smooth over this system. When foreign nations use export earnings to buy U.S. public assets (i.e., Treasuries) rather than U.S. goods and services, it creates greater demand for U.S. government debt, both externally and internally. Externally, persistent demand for U.S. assets, despite surging debt levels, places weaker pressure on U.S. leaders to spend responsibly and sustainably. Internally, the unemployment created by the weaker demand for domestically produced goods fuels demand for greater government spending to compensate for lower wages and higher unemployment. This fuels higher inflation in government-related sectors (e.g., healthcare and education)¹³⁰Nick Routley, “Consumer Price Inflation, by Type of Good or Service (2000-2022),” Visual Capitalist, February 22, 2023. as government spending rises faster than increases in supply and productivity.¹³¹In an essay for American Affairs, Russell Napier discusses at length how China devalued its currency exchange rate starting in 1994, largely through U.S. asset purchases. Russell Napier, “America, China, and the Death of the International Monetary Non-System,” American Affairs 8, no. 4 (2024): 3-15. This strategy helped keep U.S. interest rates low regardless of overall growth, lowering the relative cost of U.S. debt and inflating demand for U.S. assets (especially relative to demand for increased production capacity). China’s excessive investment in productive capacity (fixed asset investment)—which rose from $360 billion in 2000 to $7.9 trillion in 2022—further lowered pressure on U.S. interest rates by keeping goods prices low and apparently reducing global inflation. Such a system also favors those with higher savings and assets (whether shares, bonds, real estate, or intellectual property rights) and those who receive or provide government-funded benefits, over private-sector producers and individuals whose prosperity is primarily defined by income.¹³²Mark A. DiPlacido, Redefining Income Is the Wrong Approach to Inequality, American Compass, June 26, 2024.

Economists argue that the working and middle classes benefit from lower prices under the current system. But an economic system that imports ever cheaper manufactured goods while producing wage stagnation and rising inequality leaves households with larger TVs but further from achieving middle-class security.¹³³Oren Cass, The 2023 Cost-of-Thriving Index, Executive Summary, American Compass, February 2023. While consumer goods may have become cheaper over the last 40 years, the average male head of household now has to work 62 weeks to earn enough to cover the same basket of goods he could have purchased for his family with 40 weeks of labor in 1985, accounting for increases in the cost of food, housing, health care, transportation, and education. 

Furthermore, lower prices will not last if the United States continues to allow predatory nations to capture entire markets. China’s prices will eventually adjust, either out of economic or political necessity, as it gains a stronger market position to demand higher prices.¹³⁴China’s export prices are lower than they were in 2014 and its total debt-to-GDP ratio reached 303% last year. Pettis, The Relationship Between Chinese Debt and China’s Trade Surplus. Russell Napier argues that “China’s inability to run sufficient surpluses since 2014 to generate sufficient broad money growth and prevent the escalation of its already high debt-to-GDP ratio is not widely recognized as a similar problem [to insufficient U.S. gold reserves in 1971]. Yet China’s move to a flexible exchange rate to…create sufficient growth in broad money to reduce its debt burden will end the [current monetary “non-system”] as surely as President Nixon’s announcement that the U.S. dollar was no longer linked to gold ended Bretton Woods.” Napier, “America, China, and the Death of the International Monetary Non-System.” Likewise, the ever-increasing budget deficits of the U.S. government, which increasingly sustain U.S. consumption levels, cannot continue indefinitely.

A Better Deal

The internal political dynamics resulting from globalization have fueled two approaches to widening imbalances and inequalities. One strategy, generally favored by the Left and pro-business Right, is greater redistribution through taxes and government transfers.¹³⁵Joi Ito, “The Paradox of Universal Basic Income,” Wired, March 29, 2018. This was recently termed the “compensate the losers” strategy in a 2023 working paper for the National Bureau of Economic Research.¹³⁶Ilyana Kuziemko, Nicolas Longuet-Marx, and Suresh Naidu, “Compensate The Losers?” Economic Policy and Partisan Realignment in the U.S., Working Paper no. 321 (Princeton: Princeton University Griswold Center for Economic Policy Studies, March 2024). The New Right¹³⁷The New Conservatives: Restoring America’s Commitment to Family, Community, and Industry, ed. Oren Cass (Washington, D.C.: American Compass, 2025). and (generally) those with fewer degrees would instead prefer to see greater “pre-distribution,”¹³⁸Rebuilding American Capitalism: A Handbook for Conservative Policymakers (Washington, D.C.: American Compass, 2023). such as setting higher tariff rates, revaluing the U.S. dollar, or creating fairer market conditions for U.S. producers. Rather than seeing greater power concentrated in the hands of the winners—whose alignment across academia, finance, corporations, media, and government have visibly formed a distinct elite in recent decades—rebalancing trade would reset the general terms of the economy, allowing more Americans across regions, socioeconomic groups, and educational backgrounds to have a direct stake in the economy, enhancing wider economic sovereignty.

Furthermore, balancing trade and capital flows will begin to reverse previously unacknowledged tradeoffs. Instead of most of the nation’s growth accruing to those who already hold assets, the greater demand for goods and services in the immediate economy will prompt increased investment in the real economy, enhanced economic resilience and security, and wage increases for the middle class, rather than artificially low prices, higher corporate profits, inflated stock valuations, and government debt accumulation. Such an approach is a much better deal than the non-intervention and global deference offered by proponents of globalism on the right and left.