We don’t have an existential crisis before us on tariffs, but current policy makers are framing it as such.  Nonethless, as too often in economic matters, there’s a terrible amount of misunderstanding in the American populace so it would be good just to concentrate on facts.  As a starting point, we would do well to recognize there is nothing fundamentally wrong about the ‘trade deficit’. In pure economic terms, it is a direct result of American buyers (consumers and business) being rich enough to buy goods where they can stretch their dollars best.

Regarding the manufacturing sector itself, the employment in the United States is roughly 12.8 MM[i] people.  That figure is roughly 9.4%[ii] of the private sector employment.  In 1953, the percent of employment in manufacturing peaked at 32%[iii]. Whoa, you say.  That drop of 23% is what scares many people.  However, here’s two tidbits to keep in mind:

1. Our American workforce grew over these past 70-years and non-farm sector jobs now total 159.4 million people[iv].  In 1953, the number of people employed in the United States was +/- 50 MM.  Thus, just computing the easy math, as a country we have 100 MM more people working now than we did then.
2. Manufacturing jobs actually peaked in 1979 at 19.4 MM jobs.  Jobs have been declining since then, but output has been massively expanding.  In 1979, manufacturing output was roughly $500 Billion.  As of December 2024, it was up nearly six times that figure, at $2.94 Trillion[v]. 

There are many reasons tariffs are argued, and ‘unfair’ (meaning non-reciprocal) tariffs represent one offered rationale.  However, one of the illogical reasons offered is that we want to bring more wages and jobs back to the United States (“onshoring”).  One of the national economic gurus is our Secretary of Commerce, Howard Lutnick, who recently said increased tariffs…

“…will result in things like “the army of millions and millions of human beings screwing in little screws to make iPhones” coming to the US.”

I’d like you to juxtapose the forementioned comment proclaiming tariffs as being necessary to protect the United States (and, conversely, how much the global trading system has hurt America) with these six realities:

1. Tariffs are a tax. When you tax more of something, you get less of it, not more of it. Research shows 98% of all apparel and shoes Americans buy are imported.[vi] Americans like buying their clothes cheap and if prices go up, purchases will go down.
2. If you invested $5,000 in the S&P 500 at the beginning of 1980 (i.e. the end of peak manufacturing employment), you would have about $384,347 at the end of 2024, assuming you reinvested all dividends. This is a return on investment of 10.13% per year, which is the average rate on the S&P 500 since 1957[vii].  Given the market jumped 9.5% in one day after the April 2025 tariffs were suspended, the fastest daily stock exchange increase in 17-years[viii], you can feel how closely the market is glued to an open trading system.
3. When tariffs on steel were implemented in the first Trump Presidency, it is estimated that it cost $900,000 per job saved[ix]. 
4. Notwithstanding the argument offered that the intricate and integrated global trading system is bad for the United States, the economic engine of the U.S.A. remains the envy of the world.  The American population represents 4.2%[x] of the global headcount yet the country comprises a startling 26% of world GNP[xi].
5. According to the National Association of Manufacturers, there are currently 482,000 unfilled jobs in manufacturing.  If we have more companies ‘onshoring jobs’ we will need to think creatively about how we fill those positions.
6. The United States has a final demand share of global imports of only 15%[xii].  We simply don’t dominate international trade — and if we make it too difficult or unprofitable to do business, sellers will go elsewhere.

Notwithstanding all the above, let me conclude by saying what should be addressed in tariffs:

1. China has unapologetically stolen Intellectual Property (IP) from the United States and other countries for 30 years.  That theft, plus low labor costs, has taken Chinese exports from less than 10% of U.S.A. export levels in 1999 to surpassing USA exports in less than 10 years[xiii].
2. Truly non-reciprocal tariff levels imposed by other countries need to be leveled. If that is to happen, however, we need to keep in mind the sugar and peanut industries in this country have made multi-millionaires of some families and would also need to be eliminated.
3. Non-tariff barriers in other countries must be made equal. These barriers range from esoteric rules for product licensing to subsidies for in-country state supported competitors.

The global trading system has been harnessed to lift millions of this planets households out of poverty and all the data says it has worked pretty well to benefit most Americans.  Tariffs, or the threat of rising tariffs, might be a good negotiating ploy to fix some broken machinery, but when doing so you have to very mindful of throwing sand into some finely meshed gears. 

It remains my deep and distinct honor to serve you well.

Patrick Zumbusch
Founder and CEO

P.S. On a very personal topic not related to national economics but most assuredly related to Wellspring, I share with you that my mother died this past week.  She grew up with nothing, and our own home was fairly poor with seven kids, but nonetheless she was an avid believer that we should always be good to our neighbors. That value system of treating others right and helping them is THE reason Wellspring was started. After my research on how the industry worked, discovering that there was a better, fairer and more comprehensive approach to helping families with their finances, I started Wellspring.  The free YouTube 3MinuteMoney channel to help with insightful knowledge represents that conviction on steroids. Every action taken by the employees at Wellspring is to live that value system out. Therefore, any compliments you have kindly given to me over the years is really due to my mom.

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[i] “How The U.S. Slipped From Top Manufacturing Perch” (Dustin Lahart, Dow Jones and Company, April 14, 2025)

[ii] -ditto-

[iii] “Forty Years Of Falling Manufacturing Employment” (Katelynn Harris, Beyond The Numbers, U.S. Bureau of Labor Statistics, November 2020)

[iv] “US Total Nonfarm Payrolls” (Y-charts, April 27, 2025)

[v] “Facts About Manufacturing” (National Association of Manufacturers, April 23, 2025)

[vi] “The Puzzling US Apparel Import Data…” (Sheng Lu, Global Apparel & Textile Trade and Sourcing- FASH455, University of Delaware, April 15, 2024)

[vii] “S&P 500 Average Returns and Historical Performance” (J.B. Maverick, J. Mansa, V. Valasquez, Wikipedia, December 26, 2024)

[viii] “The Age Of Chaos” (Economist,  April 12, 2025)

[ix] “$900,000 per job” (Mark Perry, American Enterprise Institute, May 8, 2019)

[x] “United States Population” (Worldometer, April 28, 2025)

[xi] “Economy of the United States” (Wikipedia, April 28, 2025)

[xii] “Ruination Day” (The Economist, April 5, 2025)

[xiii] “How The U.S. Slipped From Top Manufacturing Perch” (Dustin Lahart, Dow Jones and Company, April 14, 2025)