After World War I United States emerged as the leading industrial giant with a large manufacturing base.
New Businesses in automobile industry, refrigeration, road building, ship building and textile industry were expanding at a vast scale so that manufacturing jobs were plentiful. The import tariffs were kept high and all the domestic output of US industry was consumed internally through trade between the 50 US states.
The percentage of international trade as a share of GDP was relatively low.
However, over the last few decades, the percentage of manufacturing jobs has been declining in the US as a share of total jobs market and there is concern among US public as well as business community that lost manufacturing jobs to Asia and Latin America may never come back.
According to bureau of labor statistics, from 1945 to 1960, the percentage of manufacturing jobs as a share of total jobs fluctuated between a healthy 30-35%, whereas from 1960 to 1980, this percentage declined to 20%. From 1980 to 2008, the manufacturing share of jobs declined to an alarmingly low 10% and after 2008 financial crises, this share is now below 10% and falling.
Many reasons have been given for this decline. First, big and medium sized corporations find it cheaper to produce goods since the labor costs are one fifth to one tenth in Asia and Latin America compared to North America.
Second, although US dollar is world currency, exchange rates of large manufacturing regions like China are said to be kept artificially low thereby making Chinese exports more competitive. This makes any manufacturing business inside US to operate profitably virtually impossible.
Due to globalization and formation of world bodies such as WTO, the momentum in favor of manufacturing jobs attrition from high wage regions like US to lower regions like China is high and Americans will continue to lose large numbers of manufacturing jobs to foreign countries.