Question

how does manufacturing in foreign countries impact manufacturing employment in the usa and USA trade balance?

Answer 1

Answer: manufacturing employment would be low and it leads to US trade deficit.

Explanation:

Once foreign countries are engaging in manufacturing, labors or employees would be engaged there, and therefore, US manufacturing may face shortage of labor. This creates under-employment in the US – manufacturing employment would decrease.

Once there is under-employment, there would be under-manufacturing too. Production in the country would be low. This reduces Export but increases Import, since domestic consumers may fulfil their demand by importing. As we know [trade balance = Export – Import], the reduction in export and the increase in import at the same time create negative trade balance, indicating trade deficit.