That's not entirely true. We still produce a tremendous amount of industrial output, but that proportion has been shrinking relative to the rest of the world and our own economy.
Originally Posted by noonwitch
Two-thirds of U.S. exports are material goods. The largest sub-category (25%) is capital equipment, such as computer equipment, semiconductors and medical equipment. The second largest (20%) is industrial machinery and equipment, including plastics, chemicals and petroleum products. Only 5% of exports are automotive, while 6% is food and beverages. Despite being such a large exporter, the U.S. exports less than it imports.
The remaining third of exports are services. In addition, the U.S. exports more services than it imports. That's because of U.S. success in exporting intellectual property, such as technical information. The three largest export categories in services are royalties and license fees, travel services and financial services
What Does the U.S. Import?:
The U.S. imports
more than it exports. As a result, it's the world's largest importer. More than 80% of U.S. imports are goods. The largest category ($756.6 billion in 2011) is industrial machinery and equipment, which includes plastics and chemicals. Within this, the largest category is oil and related petroleum products. In 2011, the U.S. imported $439.3 billion of petroleum products, the highest level since 2008.
So, it's not completely dismal. The reason that our exports have dropped relative to other parts of the world is that in a free global economy, your most expensive commodity has to compete with that same commodity in other countries, where it is cheaper. Our most expensive commodity, relative to the rest of the world, is labor, especially entry-level labor. Consequently, it's going to be cheaper to produce products overseas that are labor intensive but which do not require much sophistication in assembly, such as clothing or low-end electronics. The question is, do we want to get back in the business of using US labor to manufacture trinkets? Our real focus ought to be on energy, high tech manufacturing and agriculture. We need to be able to feed ourselves, be independent of foreign energy sources, and maintain an industrial base that can manufacture the strategic ordnance that we need in order to protect ourselves.
The second largest sub-category is consumer goods, which totaled a record of $513.7 billion in 2011. It imported $107.4 billion of food, feeds, and beverages. In addition, the U.S. imported $254.1 billion in automotive vehicles. For updated numbers, see U.S. Trade Deficit
.(Source: U.S. Census, Exhibit 6 - Imports by End-Use Category
)(Article updated May 18, 2012)