For a long, long time, I was an adamant free-trader....
IMO, part of the problem is that we let countries like China get away with targeting and taking out industries in the US. We do not aggressively enough pursue intellectual property rights. (I have considerable direct experience with that one!) And so on.
Plus, while I certainly agree that our own Gov’t is a huge part of the problem (regulations, etc.), countries that are considerably more Socialist, regulated, etc. (eg. Germany) are beating our pants off too. I just bought top line (for them) General snow tires (they really are terrific tires for the modest price) and where are they made? Germany! Higher value at modest cost TIRES from Germany? How the heck does that happen? This is far from the only example...
Further, if I buy groceries, almost all that money stays in my country, and circulates around. If my money goes to China, my neighbor may be out of a job, and if so cannot afford MY product.
Let’s say 10 million people in the US are out of jobs due to manufacturing going overseas, and ripple effects (I think that’s probably a very low figure). I’ll guess they would earn $50,000 per year if employed here. (Probably low, too.) That’s $500 billion dollars “not happening.”
Or, use a current example with a few modifications: Let’s say that for whatever reason, US oil production drops 50%, but is made up for by increased worldwide production, so prices stay stable. What does this do to the US economy? In particular what does it do when those oil production workers cannot find good jobs (or simply displace others in almost-as-good jobs)?
The value-received idea is good as far as it goes, but it is overly simple and does not account for other effects. It assumes that if some overseas company is good at producing widget A at low cost, we can always come up with widget X or service Z, to export (and not have immediately stolen!), to compensate. And it assumes displaced workers will find some other equivalent (in terms of overall cost of living) employment. For most of America’s history, those things were true. Unfortunately, they are true no longer.
The engagement of buyers and sellers for their own self interest on the open, free market works to the extent our government doesn’t interfere. Buyers will ALWAYS look for the best quality at the lowest price. Sellers on the competitive market are ALWAYS driven to offer the highest quality for the lowest price to gain market share. That is how the world goes ‘round and how the free market brings high standards of living.
The only reason it works less these days is because of government interference.
And it assumes displaced workers will find some other equivalent (in terms of overall cost of living) employment. For most of America’s history, those things were true. Unfortunately, they are true no longer.
Apparently everyone is supposed to be employed in debt collecting, the “service” industry (maids? nailologists? psychologists?), and various levels of gov from local to fed. Oh, and fast food.