The US may not be the world’s factory, but it’s the world’s brain. As countries form their tariff responses, experts are watching for tailored broadsides not at American goods, but its services.
Despite running deep deficits in manufacturing, America sells $300 billion more in financial advice, IP licenses, consulting slide decks, and other services to other countries than it buys from them. Europe is already readying a long-discussed digital tax that would hit big US tech companies.
“Just wait a few weeks,” Jason Furman, a former Obama economic adviser, tells Semafor. Rivals will “hit us where it hurts.” Tariffs on financial and digital services would bring Wall Street and Silicon Valley CEOs into a fight that so far has hit heartland manufacturers.
well… it’s gonna suck bad for a while, but the less reliance the world has on American goods and services while they’re infected with right wing authoritarian cultists brain rot, the better well be for it I think. The pre trump world seems like a beautiful dream of a better time now….
Thetman38 on
Just wait for other countries to ban services like Google and Netflix
JohnOfA on
Can someone ELI5 this. I understand manufacturing has been moving to less expensive countries or being undercut and pushed out of the market, hence the trade deficit. But why do they think that manufacturing companies will magically want to move back or build in the US? How many companies built plants in Mexico for the low labor costs? Are they going to offer minimum wage at the new US plants? How does that improve the situation of chronically low wages in the US. Something I hear Oren Cass harping about when referring to the “working family”.
ColoradoBrownieMan on
This was good – we got cheap goods from countries that specialized in those goods and exported our services to other countries. That’s how it’s supposed to work – trade benefits the consumer. American consumers benefitted from cheaper wages around the world, while receiving higher wages in the US. Deficits aren’t inherently a bad thing – I have a deficit with the grocery store (I give it money on a weekly basis in exchange for goods.) My employer has a deficit with me (it gives me money every other week in exchange for services I provide it.)
Too bad Donny saw the word “deficit” and immediately assumed bad.
![[OC] US balance of trade](https://www.byteseu.com/wp-content/uploads/2025/04/tjnehhy2uste1-1536x1524.jpeg "[OC] US balance of trade")
6 Comments
From the [Semafor Business](https://www.semafor.com/newsletter/04/08/2025/us-trading-partners-face-a-choice-retaliate-or-cave?utm_campaign=semaforreddit) newsletter:
The US may not be the world’s factory, but it’s the world’s brain. As countries form their tariff responses, experts are watching for tailored broadsides not at American goods, but its services.
Despite running deep deficits in manufacturing, America sells $300 billion more in financial advice, IP licenses, consulting slide decks, and other services to other countries than it buys from them. Europe is already readying a long-discussed digital tax that would hit big US tech companies.
“Just wait a few weeks,” Jason Furman, a former Obama economic adviser, tells Semafor. Rivals will “hit us where it hurts.” Tariffs on financial and digital services would bring Wall Street and Silicon Valley CEOs into a fight that so far has hit heartland manufacturers.
[Read more here.](https://www.semafor.com/newsletter/04/08/2025/us-trading-partners-face-a-choice-retaliate-or-cave?utm_campaign=semaforreddit)
Source: Bureau of Economic Analysis
Tool: Datawrapper
From a quick look at [This chart](https://apps.bea.gov/iTable/?reqid=62&step=9&isuri=1&product=4#eyJhcHBpZCI6NjIsInN0ZXBzIjpbMSw5LDZdLCJkYXRhIjpbWyJwcm9kdWN0IiwiNCJdLFsiVGFibGVMaXN0IiwiNDA1Il1dfQ==) from the U.S. Bureau of Economic Analysis, it looks like Finance (net $56 Billion) and Publishing (net $34 Billion) are two big ones.
well… it’s gonna suck bad for a while, but the less reliance the world has on American goods and services while they’re infected with right wing authoritarian cultists brain rot, the better well be for it I think. The pre trump world seems like a beautiful dream of a better time now….
Just wait for other countries to ban services like Google and Netflix
Can someone ELI5 this. I understand manufacturing has been moving to less expensive countries or being undercut and pushed out of the market, hence the trade deficit. But why do they think that manufacturing companies will magically want to move back or build in the US? How many companies built plants in Mexico for the low labor costs? Are they going to offer minimum wage at the new US plants? How does that improve the situation of chronically low wages in the US. Something I hear Oren Cass harping about when referring to the “working family”.
This was good – we got cheap goods from countries that specialized in those goods and exported our services to other countries. That’s how it’s supposed to work – trade benefits the consumer. American consumers benefitted from cheaper wages around the world, while receiving higher wages in the US. Deficits aren’t inherently a bad thing – I have a deficit with the grocery store (I give it money on a weekly basis in exchange for goods.) My employer has a deficit with me (it gives me money every other week in exchange for services I provide it.)
Too bad Donny saw the word “deficit” and immediately assumed bad.