The foundation for the reemergence of American manufacturing is happening quickly after nearly five decades of ramping up outsourcing—at least the corporate manufacturing pledges of $8 trillion and counting during the writing of this article trend in a positive direction. While new manufacturing is still a work in progress, let’s review the unwinding of what was the manufacturing sector in America.
In an issue of the Trumpet in 2006, Robert Morely wrote an article entitled, The Death of American Manufacturing. Morely: “Manufacturing loss is occurring because of globalization and outsourcing. Globalization is the increased mobility of goods, services, labor, technology, and capital throughout the world; outsourcing is the performance of a production activity in another country that was previously done by a domestic (U.S.) firm or plant.”
In 1965, manufacturing accounted for 53% of the U.S. economy. By 1988 it only accounted for 39%, and by 2004 it accounted for just 9%. Where did all the jobs go? The U.S. Department of Commerce numbers show U.S. corporations cut their workforces in the U.S. by 2.9 million jobs during the 2000s while increasing employment overseas by 2.4 million jobs.
Over half of those jobs went to Asia, i.e., mainly to China. This outsourcing of U.S. manufacturing only gathered steam heading into the new millennium; the lure of cheap foreign labor became irresistible—and eventually unsustainable. Besides kowtowing to foreign governments and gambling with foreign ports and supply chains, the irony is inescapable: U.S. companies now offshored were selling products back to the Americans they had abandoned at the unemployment line.
But free enterprise is . . . an almost-free market open to international trade with obvious exceptions. Restrictions will be imposed by governments, such as not permitting trade with terrorist-designated states, and complying with corporate tax rates, overseas duties, and tariffs. Could federal, state, or local incentives have been made to keep many offshored manufacturers in the U.S.? Federally, that would be a White House decision, and state governors and legislators decide just how pro-business their states should be. Locally, mayors and city councils often lure new manufacturers to their cities via tax incentives. Many iconic brands still remain headquartered in the U.S., but have expanded overseas to make marketing globally easier, such as setting up distributorships while still manufacturing in the U.S.
However, in the 1990s, corporate America didn’t just cross a red line—it erased it. By heavily outsourcing to China, the largest communist country, it allowed the most populated country in the world to rise to superpower status and aim at global hegemony. In 1998, the Clinton administration told congress it had transferred missile technology to China. And since then, China has pirated American fighter jet, computer, and vanadium battery technology among others. America—indeed most of the West—finds itself trying to claw free of China’s grip for its own political and economic survival. The proof is in the receipts.
Examine, for a moment, the U.S. Census Bureau’s numbers revealing America’s trade deficit with China. In 1985, the U.S. trade deficit with the Chinese was only $6 million. By 2000, just 15 years later, the trade deficit had grown to $83.8 billion. Two years later it ballooned to $162.3 billion. By 2024 the deficit found itself at a hefty $295.4 billion. In 2016, China represented 38% of the U.S.A.’s overall trade deficit of $654.5 billion.
Also, U.S. Bureau of Labor Statistics recorded from 1979 to 2015 show manufacturing in the U.S. declined by 37%, mainly as a result from reshoring to China. That’s a precipitous drop of over 7 million U.S. manufacturing jobs after a 40-year buildup from 1939 to 1979. But what kind of manufacturing jobs? More numbers: Since 2001, The U.S. textile industry has lost 63% of its jobs. The communication equipment industry lost 47%, and motor vehicles and parts lost 43% of its workforce. Sales for U.S. tooling (machines) dropped 78%. While these numbers fluctuate year to year, it’s clear American outsourcing since the late 1980s has run its course. For a country with largest GDP to be mostly dependent on foreign manufacturing is impractical at best, and at worst, suicidal.
Much of Europe went all in with China, too. According to the Foundation for Defense of Democracies in 2023, Airbus, Europe’s major aerospace company, traded the Chinese government sciences and technology (including avionics) for a significant Chinese market share. And recently China returned a Boeing 737 Max back to the U.S. due to a tariff tiff. Reshoring is occurring at a faster pace than in 2023, but it won’t happen overnight.
Chinese policy expert Emily de La Bruyere, a senior fellow at the Foundation for Defense of Democracies (FDD), and founder of Horizon Advisory, offers her insight. According to De La Bruyere, when it comes to foreign companies breaking away from China, a higher percentage of Chinese ownership in foreign companies usually calls for a slower decoupling strategy. De La Bruyere cites Airbus (Europe’s major aerospace company) decoupling dilemma—23% of Airbus’ revenues come from China. At the current rate of Chinese expansion, including their aerospace industry, they simply won’t need Airbus anymore.
To use a wrestling or boxing simile, it feels like American manufacturing just went up a weight class in 2025. As of May 1, 2025, $8 trillion of new or expanded manufacturing facilities have been pledged by top companies: Apple, NVIDIA, IBM, Taiwan Semiconductor Manufacturing Company, Johnson & Johnson, Toyota, Roche, Eli Lilly and Company, and GE Aerospace (a full list of companies will be available in Part 2 of this article).
In the next InfoPower we’ll look at the American work ethic, trade and tariff progress, and the value of buying American versus imports.