Reports of the death of U.S. manufacturing have been greatlyexaggerated. Since the depth of the manufacturing recession in2002, the sector as a whole has experienced robust and sustainedoutput, revenue, and profit growth. The year 2006 was a record yearfor output, revenues, profits, profit rates, and return oninvestment in the manufacturing sector. And despite all the storiesabout the erosion of U.S. manufacturing primacy, the United Statesremains the world’s most prolific manufacturer–producing two and ahalf times more output than those vaunted Chinese factories in2006.
Yet, the rhetoric on Capitol Hill and on the presidentialcampaign trail about a declining manufacturing sector is reaching afevered pitch. Policymakers point repeatedly to the loss of 3million manufacturing jobs as evidence of impending doom, eventhough those acute losses occurred between 2000 and 2003, and jobdecline in manufacturing has leveled off to historic averages.
In the first six months of the 110th Congress, more than a dozenantagonistic or protectionist trade‐related bills have beenintroduced, which rely on the presumed precariousness of U.S.manufacturing as justification for the legislation. Justificationfor those bills is predicated on the belief that manufacturing isin decline and that the failure of U.S. trade policy to addressunfair competition is to blame. But those premises are wrong. Thetotality of evidence points to a robust manufacturing sector thathas thrived on account of greater international trade.