In this episode of The Manzella Report, John Manzella explores the critical role international trade plays in driving U.S. economic growth, job creation, and competitiveness—and warns how protectionist policies threaten to undermine these benefits.

He begins by noting that trade has lifted millions out of poverty, expanded standards of living, and especially benefited the U.S. economy, which thrives on economies of scale. Today, international trade supports 41 million American jobs, with workers in export-intensive industries earning significantly more than average. Yet, despite this, the U.S. is shifting toward protectionism.

Manzella outlines how free trade agreements open opportunities for American businesses. Although the U.S. has just 14 agreements covering 20 countries, those markets account for nearly half of U.S. exports despite representing only 6% of global consumers. Meanwhile, hundreds of other regional trade agreements are being formed worldwide without U.S. involvement, leaving American companies less competitive.

He challenges common misconceptions about imports, explaining that they lower costs, increase consumer choice, help fight inflation, and supply vital inputs for U.S. manufacturing. Far from weakening the economy, imports sustain millions of jobs across sectors like retail, wholesale, and transportation. He also stresses that declining U.S. manufacturing jobs result largely from automation and productivity gains, not imports.

Turning to trade deficits, Manzella argues that tariffs don’t eliminate them, since deficits are shaped by factors such as investment flows and savings rates. He cites examples where countries with low tariffs run surpluses, while protectionist economies still face deficits. Instead, tariffs raise costs, fuel inflation, and ultimately hurt more jobs than they protect.

Manzella highlights the risks of proposed U.S. tariffs on Canada and Mexico, America’s largest trading partners. Because North American industries—particularly automotive—are deeply integrated, tariffs would raise costs multiple times as parts cross borders repeatedly, making the entire region less competitive.

Drawing parallels to the 1930 Smoot-Hawley Tariff Act, which worsened the Great Depression, he cautions against repeating history. The smarter path, he concludes, lies in forward-thinking trade policy that expands market access, fosters competitiveness, and strengthens alliances.

In this keynote presentation, John Manzella, author of Global America, outlines key economic trends shaping the future of U.S. competitiveness, trade, and globalization. Speaking to a live audience, he emphasizes the risks and opportunities presented by shifting demographics, automation, labor shortages, and international trade dynamics.

Manzella begins by stressing the importance of entrepreneurship and risk-taking, which fuel job creation and innovation. Yet he highlights a major challenge: 10,000 baby boomers retire daily, taking critical skills with them, while the U.S. faces worsening labor shortages. Immigration, he argues, is vital to filling these gaps. U.S. universities attract the best global talent, but restrictive visa policies send them home, where they compete against American companies.

He turns to the generational shift in the workplace, noting that millennials and younger workers bring a different culture and expectations. Employers must adapt, offering benefits and flexibility that align with this workforce’s values.

Addressing China, Manzella critiques the sustainability of its economic system. He argues that China’s reliance on state planning, subsidies, and imported energy presents vulnerabilities. Rising wages and structural imbalances mean the era of low-cost Chinese imports—which kept U.S. inflation artificially low—is ending. While some production may shift to India, Vietnam, or Mexico, no country can replicate China’s scale in the near term.

Manzella also examines globalization, arguing it is not dying but evolving. With billions of middle-class consumers emerging outside North America and Europe, U.S. companies must compete in foreign markets to thrive. He cites GM’s sales in China as an example of global demand shaping corporate strategy.

He explains the benefits of free trade agreements, noting that nearly half of U.S. exports go to just 20 countries covered by U.S. agreements. Lowering trade barriers, he stresses, allows U.S. workers and companies to compete globally. At the same time, he warns of populist movements on both the left and right that threaten capitalism if economic systems swing too far toward inequality or state control.

Ultimately, Manzella calls for balanced capitalism, forward-looking trade policies, and an immigration system that secures America’s future competitiveness in a rapidly changing world.

In this episode of The Manzella Report, global business and economics expert John Manzella outlines three pressing risks and realities facing the United States and Europe, each of which has profound implications for competitiveness, growth, and stability.

The first challenge is the uncertain direction of globalization and rising tensions with China. Manzella stresses that both the U.S. and Europe rely on economies of scale and must secure access to the world’s 8 billion consumers—not just their domestic markets. Yet protectionism is rising, new free trade agreements are unlikely, and U.S.–China frictions are accelerating economic decoupling in high-tech sectors. He warns that as China becomes less stable, it may also become more aggressive, further disrupting global supply chains. In this environment, risk mitigation must take precedence over efficiency gains in strategic planning.

The second issue is demographic shifts and worsening labor shortages. Fertility rates are declining across the U.S., Europe, China, and other nations—falling below replacement levels. Without policies to boost legal immigration or the rapid deployment of productivity-enhancing technologies, countries face a shrinking labor force, fewer consumers, and fewer investors, all of which undermine living standards. With immigration politically contentious, Manzella notes that many nations will increasingly turn to automation as the only viable solution.

The third risk is rising inequality and the threats it poses to capitalism. Economic and cultural divides are fueling populism on both the far left and far right. Manzella explains that left-wing populism often raises taxes in ways that discourage entrepreneurship and investment, while right-wing populism can foster crony capitalism that benefits elites at the expense of sustainability. Both extremes endanger capitalism. The only way forward, he argues, is for political leaders to find middle ground through compromise.

Manzella concludes by stressing that navigating these challenges will be difficult, but adapting to them is absolutely necessary for long-term prosperity.