FACT: U.S. layoffs are up for four consecutive years.

THE NUMBERS: Annual U.S. layoffs*

2025	21.2 million
2024	20.0 million
2023	19.9 million
2022	17.6 million
2021	17.1 million
2020 (pandemic year)	40.8 million
2015-2019 average	21.7 million

Bureau of Labor Statistics, Job Openings and Labor Turnover survey.

WHAT THEY MEAN: 

An idea for the next Congress, floated four years ago by then-PPI Workforce Policy Development Director Taylor Maag and Ed Gresser, and still good now: revive the Trade Adjustment Assistance program, but open it to everyone.

As an entry point, the Raleigh News & Observer has a stark lede last week:

“American tiremaker Goodyear Tire & Rubber plans to shut its long-running Fayetteville plant and eliminate approximately 1,700 jobs in what would be one of the biggest factory closures by employment loss in recent North Carolina history. Goodyear announced this week it is talking with the local workers’ union to end site operations by December 2027.” 

Not only North Carolina’s largest recent factory closure, this event appears to be the largest U.S. mass factory layoff outside the processed-food business in the 15 years since the end of the financial crisis. To put the impact in context, Metro Fayetteville is home to about 390,000 people, with the Goodyear plant joining a Wal-Mart distribution center and the local hospital as the top private-sector employer. Goodyear’s press comment cites short-term cost issues and lower consumer demand for tires; its quarterly earnings calls cite a loss of $420 million this year to “inflation, tariffs, and other costs” as a complementary challenge. (See Eric Boehm in Reason for a close look at the event, and analysis of the impact of tariffs and the Iran war’s interruption of petrochemical stocks for synthetic rubber.)

This particular closure comes in a larger environment in which layoffs are not at extreme highs, but have risen for five years in a row. According to the Bureau of Labor Statistics’ “Job Openings and Labor Turnover survey, last year’s 21.2 million layoffs were the largest annual total since the Covid pandemic in 2020, and about equal to the rates of the 2010s. To put this aggregate figure in human perspective, each day about 161 million Americans go to work, and about 60,000 come home with pink slips.

Their standard support program, unemployment insurance, provides a post-layoff stipend of up to 26 weeks in some states as they look for the next job. From 1962 through the summer of 2022, though, the smaller “Trade Adjustment Assistance” program offered a much broader range of options to those dislocated workers who could show that import competition or job shifts overseas “contributed importantly to [their] separation or threat of separation.” Background on this:

Origins and benefits: President John F. Kennedy launched “TAA” in 1962, as a complement to his very ambitious trade-liberalizing and tariff-cutting bill. By 2015, when TAA got the last of its 18 renewals and upgrades, it had evolved into a sort of pilot program in active labor-market policy, offering a menu of self-help options appropriate to workers with widely differing career goals and local options: two years of job training for those seeking a new career path; temporary wage insurance for older workers taking lower-paying jobs; health care tax credits; and relocation support for workers planning to move to areas with more employment opportunities. Examining the results in 2018, New York Fed researcher Ben Hyman found strong benefits for workers and a useful concentration of benefits in regions with particularly high needs:

“Ten years out, TAA-trained workers have $50,000 higher cumulative earnings, driven by both higher incomes and greater labor force participation. Yet annual returns fully depreciate after ten years. … Returns are further concentrated in the most disrupted regions.”

Small scale and structural limits: TAA didn’t, though, actually serve many workers. From 2014 to 2018, according to the DoL’s annual reports, about 85,700 displaced workers a year got TAA benefits. This would be about 0.5% of the era’s 21.6 million annual layoffs. Modest use isn’t per se a problem — lots of workers find jobs after layoffs and don’t require extra support — but the limitation imposed by TAA’s tie to trade competition made it hard to get. Since eligibility depended on proving imports or job shifts overseas “contributed importantly” to the layoff, most workers — health sector, retail, gas stations, beauty parlors, government agencies — weren’t eligible at all. And though “contributed importantly” isn’t in principle a very high bar, in practice, it created a big obstacle by requiring workers in distress to find the statistics and economic analysis necessary to demonstrate eligibility.

And a core question: The TAA concept also, as Gresser and Maag noted in 2022, had a “troubling inequity” at its core:

Workers who lose jobs to trade competition can get more generous benefits than workers who lose jobs to recession or domestic competition.  Is there really a strong ethical case to distinguish between (say) a displaced clothing factory worker and a displaced waitress or gas station attendant, and view the former as more in need of benefits or more entitled to benefits than the latter? 

With the program then on the verge of lapsing, they urged Congress to renew it, but drop the trade requirement and offer TAA-type benefits to all workers displaced through no fault of their own. Subsequent events — events such as the Goodyear factory closure, where U.S. tariff increases rather than import competition are likely the “important contributor,” or the broader acceleration of technological change and outmoding of particular skills or industries — only add force to the conclusion. Congress regrettably didn’t act then, and TAA has lapsed for four years. The new Congress arriving next January, or the early-stage presidential campaigns launching around that time, can take it up now.

FURTHER READING

PPI’s New Skills for a New Economy project, with Michael Pearson as Director, has an analysis of a robust workforce development system that is fully-funded, modern, industry-responsive, and equips current and future workers with the skills they need to get ahead.

Gresser and Maag (2022) on re-authorizing Trade Adjustment Assistance, but opening it to everyone. Their estimate was that such a program would serve about a million displaced workers annually, at a cost of about $6 billion per year.

… and follow Maag’s work at Jobs for the Future.

Layoffs:

The Raleigh News & Observer reports on Goodyear’s Fayetteville factory closing announcement.

Eric Boehm in Reason takes a close look at the events, and the impact of tariffs and war.

And the Bureau of Labor Statistics’ Job Openings and Labor Turnover survey (most recent release here; and database here) puts individual events in the context of national job openings, new hires, layoffs, quits, and retirements.

TAA data and status:

The Labor Department’s TAA database, with counts of petitions and worker certifications from 2010 forward.

… and DoL’s formal Annual Reports on TAA from 2009 to the lapse in 2022.

An evaluation from Ben Hyman of the New York Fed, 2018.

And a Ways and Means Committee renewal hearing featuring workers, firm owners, and state officials, 2021.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT: U.S. coffin prices up $100 last year.

THE NUMBERS: U.S. funerals, 2025* –

Cremations	63.40%
Burials	31.60%
Other	5.00%

* National Funeral Directors Association

WHAT THEY MEAN: 

A brief macabre parable from “Legalist” writer Han Fei-tzu (Warring States-era China, ~250 B.C.E.):

“The carriage maker making carriages hopes that men will grow rich and eminent; the carpenter fashioning coffins hopes that men will die prematurely. It is not that the carriage maker is kind-hearted and the carpenter a knave. It is just that if men do not become rich and eminent, the carriages will never sell, and if men do not die, there will be no market for coffins. The carpenter has no feeling of hatred for others; he merely stands to profit by their death.”

Whatever the merit of Master Han’s view of human nature, his specific example turns out to be wrong. People haven’t stopped dying — the U.S. bids farewell to 3 million each year — but the “market for coffins” is fading nonetheless as America’s bereaved choose cremation over burial. And as casket-makers struggle to adapt to changing American funerary tastes, tariff strategists in the Trump administration’s Commerce Department are hurrying them toward oblivion. Some data, then an explanation –

Materials, purchases, and trade: Americans typically buy about a million coffins a year. The median price is around $2,500. About 60% are metal, most often welded 20-gauge carbon steel. Another 25% are wood, mostly oak or poplar. The other 15% use synthetic materials or biodegradable boxes. U.S.-based manufacturers make about two-thirds of these coffins, and the rest come from abroad, mainly from Mexico.

Cremation vs. burial: Sir Thomas Browne’s “Urn-Buriall,” the classic authority on eternity and the tomb, views earth and fire as equally suitable for the last act: “Man is a Noble Animal, splendid in ashes and pompous in the grave.” As a matter of taste, though, Americans are steadily shifting away from the 20th century’s preference for coffin burials and toward cremation. The National Funeral Directors Association says cremation overtook burial in 2015, accounted for 63.4% of funeral services last year, and will reach 75% by 2035. One reason is cost — cremation is about $6,000 per service and burial is about $8,500, with the coffin price the main factor in the gap. 

Looking ahead a decade or two, NFDA guesses that the shrinking number of burials will cut coffin sales to 500,000 a year. U.S. casket-makers are doing their best to respond; Indiana-based Batesville, for example, is broadening its offerings to full-service remembrance offerings such as urns and jewelry.

Now to policy:

The Trump administration has been publishing “national security” tariff decrees — technically “Section 232” tariff proclamations drafted by the Commerce Department’s Bureau of Industry and Security — for the past 15 months. One of the earliest, in February 2025, imposed tariffs of 25% on steel. Another, that June, raised this rate to 50%. By winter, according to the Department’s quarterly “Steel Executive Summary,” the average price of steel in the U.S. was $971 per ton — more than double the $460 worldwide average. They haven’t yet updated the Summary for spring, but last week’s “Producer Price Index” report from the Bureau of Labor Statistics found the cost of “materials for durable manufacturing”* up 13.7% this past year. 

As metal prices rise, metal-using U.S. businesses naturally lose ground to foreigners making similar things. Thus, in August, the Department added a third “national security” metals decree declaring that large swathes of everyday goods are now considered “steel or aluminum derivative products,” also essential to national security and therefore subject to the same tariffs. This included everything from silverware and pitchforks to condensed milk, exercise equipment, shampoo, and coffins. The buyers — say, a bakery ordering whipped cream canisters, or a gym club buying a new balance beam — had to figure out the value of their purchase’s metal content and pay a 50% tariff on it. 

Months of public derision and angry business complaints forced the Department to scrap this particular decree last month and try a new version. This drops some of last year’s loonier claims — the restaurants and gym clubs are off the hook, as are buyers of mosquito repellent, shampoo, and windshield-wiper fluid — and instead simply lists a lot of things made of metal and assigns them new tariff rates. Paint rollers, flashlight parts, clothes-hangers, that kind of thing. Coffins – “iron or steel caskets for burial,” with the 10-digit HTS line 7326.90.8677 — are in Annex I-B, with a 25% tariff.  

How is all this working out? As an economic matter, setting aside the ludicrous claim that coffins are a “national security” product, Mr. Trump’s Commerce people are providing a lesson in unexamined premises, perverse incentives and unanticipated consequences. After 15 months of tariffs, Federal Reserve statisticians find coffin prices up about 4.5%. In practical terms, this means a median-tier coffin now costs about $100 more. Looking ahead, by raising the cost of both the materials and the final product, the administration is speeding up the trend toward cremation and, therefore, the decline of American casket-making. Meanwhile, we’re left with the unsettling image of tariff decrees literally chasing Americans into their graves. 

And what might be done? Sir Thomas, recognizing that all human debates share a common fate, would likely counsel equanimity and acceptance. (“The iniquity of oblivion blindly scattereth her poppy, and deals with the memory of men without distinction.”) Alternatively, Congress could — whenever it wants — save bereaved families some money, and provide a bit of help to beleaguered casket-makers, by putting a stop to this.

* This includes not only metals but the lumber used in plain pine boxes, which now also gets “national security” tariffs of 10%.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Reporting:

Mortality data from the Centers for Disease Control.

The National Funeral Directors Association reports on cremation v. burial trends.

Assessing the U.S. coffin-market outlook, Funeral Directors Daily expects sales to fall to 507,000 per year in the next two decades.

And a concerned state of the industry report for 2025, noting among much else “off-again, on-again tariffs policies that decrease economic confidence” that will likely depress consumer spending and lead the bereaved to choose less costly services.

Broader funeral market analysis from death-care consultancy Foresight, including an examination of tariff impact on caskets and urns. Sample:

“Many funeral goods – caskets, urns, cremation machines – are imported or use imported components. These come with baked-in increases from trade policy. There’s less chaos than peak trade war years, but costs are still up.”

And from the business side, the largest U.S. casket-maker, Indiana-based Batesville, looks to adapt via e-commerce and full-service remembrance offerings.

Policy documents:

April 2026: The current Commerce Department “national security” decree imposes 25% tariff on coffins.
… or direct link to the product list; coffins in Annex 1-B.

August 2025: The now-defunct “steel or aluminum derivative products” Federal Register Notice declaring condensed milk, balance beams, etc. to be made of metal.

… PPI’s Gresser, in the Wall Street Journal last fall (subs. req.), has some strong words on this idea.

June 2025: Section 232 “national security” decree, still in effect, imposes 50% tariff on steel. Similar decrees put identical rates on copper and aluminum.

And last:

From Warring States-era China, Han Fei Tzu (250 B.C.E., Burton Watson translation) takes a dim view of human nature and favors very decisive government. See “Precautions Within the Palace” for the carriage-makers and carpenters; other highlights include “The Difficulties of Persuasion” and “The Five Vermin”.

Sir Thomas Browne’s Urn-Buriall (1658) has a melancholy subject but a brighter perspective on humanity. Last reassuring word:

“[M]an is a Noble Animal, splendid in ashes, and pompous in the grave, solemnizing Nativities and Deaths with equal lustre, nor omitting Ceremonies of bravery, in the infamy of his nature. Life is a pure flame, and we live by an invisible Sun within us.”

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT:  No commercial rubber trees grow in the United States.

THE NUMBERS: Imports of goods by industry type (2024)* –

Industry type	Import value	Share of Imports
All identifiable U.S. importers	$2.925 trillion	89%
… Manufacturers	$1.220 trillion	37%
… Wholesalers	$0.971 trillion	29%
… All known others	$0.735 trillion	22%
All else, not identified by importer type	$0.370 trillion	11%

* Census Bureau.

WHAT THEY MEAN: 

As legal devices, the Trump administration’s tariff decrees are faring poorly. The Supreme Court killed most of Plan A — “emergency” declarations under the International Emergency Economic Powers Act — in February. The specialized Court of International Trade found Plan B, a Section 122 claim that the U.S. is in the midst of a “balance of payments crisis,” illegal last Thursday: 

“Because the Proclamation’s use of trade and current account deficits to stand in the place of balance-of-payment deficits within the meaning of the statute renders the Proclamation ultra vires … Proclamation No. 11012 is invalid, and the tariffs imposed on Plaintiffs are unauthorized by law.”
Plan C, announced in March and probably going live in July, disinters a third old trade law (“Section 301”), hoping to use it to impose tariffs on allegations of “structural excess capacity” and forced labor law. (PPI’s unimpressed comment here.) Court rulings on this one will presumable coming next year. In the interim, a reality check: if the administration’s decrees are struggling as a legal matter, are they nonetheless achieving their real-world economic goals? 

A year ago, the administration said that while tariff increases might cause pain, this would be transitory. Though prices might go up, and living standards for American waitresses, teachers, truck drivers, and auto mechanics might fall, new manufacturing output and jobs would compensate with better opportunities. A year later, this hasn’t happened: manufacturers have shed about 100,000 jobs, and their “GDP” share is down from 9.8% to 9.4%. Why not? A likely explanation is that the administration’s mental picture of both “trade” and “manufacturing” was naïve: manufacturers are far larger importers than it realized, and a lot of the tariff burden has fallen on them. Two examples, then the big-picture point:

1. Metal tariffs and container chassis-making: Sitting next to PPI’s Ed Gresser at the U.S. Trade Representative Office’s “public hearing” on Plan C last Friday, a lawyer for U.S.-based makers of container chassis for trucks argued that foreign chassis-makers are getting various tax breaks and other supports from their governments, and unfairly competing to sell the low-priced result to American trucking companies, so tariffs on Chinese-made chassis have simply shifted production to other countries.

Whether or not foreign chassis have gotten too cheap, the administration’s tariff decrees are definitely making the U.S.-made version more expensive. Last June’s “Section 232” tariff decree — not legally challenged so far, and thus fully in force — imposed a 50% tariff on steel on “national security” grounds. According to the Commerce Department, American buyers of steel now pay an average of $971 per ton for their metal, more than twice the $460 average their overseas competitors pay. A 40-foot container chassis costing about $25,000 requires about three tons of steel, and this price gap means the U.S. version now starts out $1,500 in the hole against foreign rivals — even before the potential Plan C tariffs on screws, coatings, rivets, lathes, sandblasters, gantry welders, laser cutters, positioning tables, etc., and all the inputs and capital equipment needed to make things out of metal.

2. Natural rubber tariffs and airplane tire-making: The March “Federal Register Notice” announcing Plan C cites a “trade surplus in rubber” as grounds for putting Thailand on its 16-country investigation list. Thailand does indeed have such a surplus, but this is natural — in economic terms, a consequence of Southeast Asia’s “absolute advantage” in rubber trees — and a Plan C tariff on Thai rubber would help nobody and harm lots of American manufacturers.

To explain, the U.S. uses about 3 million tons of rubber a year. This includes 1 million tons of natural rubber produced by rubber-tree tapping, and 2 million tons of artificial rubber produced in factories. They aren’t substitutes for one another: artificial rubber is less chemically active and therefore preferred for gaskets, fan belts, tubes, and the soles of shoes; natural rubber, being stretchier and more friction-resistant, is the main material for airplane and truck tires, as well as for condoms, surgical gloves, construction joints, and medical devices.  

All natural rubber comes from abroad — mainly Southeast Asia, secondarily West Africa — because the rubber tree, Hevea brasiliensis, is a tropical plant which thrives in hot, rainy climates. (Curious D.C. Metro residents can see one in the U.S. Botanical Gardens’ climate-controlled Tropics Room near the Capitol.) Since rubber trees don’t grow in places with cold winters, the U.S. produces no natural rubber at all. Tariffs on natural rubber, no matter how high, won’t bring rubber-tree plantation jobs to Minnesota or North Carolina, but will raise costs and reduce sales for every U.S. manufacturer of airplane and truck tires, vibration dampers in bridges, specialized medical equipment, and so on.

These specific cases illustrate a systematic administration error: a belief that “trade” operates on something like 19th-century terms, with manufacturers buying raw materials, farmers and miners exporting bulk commodities, and countries competing to export finished manufactured goods. This wasn’t exactly true then, and hasn’t been close to reality since the 1950s. Just-in-time delivery, supply chains, and coordinated production mean the largest amount of trade is in “intermediate” goods — neither raw materials nor finished stuff, but parts and components used to assemble more complex things. The largest U.S. importers are accordingly not “buyers of finished goods” such as retail chains, hospitals, construction firms, restaurants, and so forth. Instead, they are the chassis-makers buying metals, the airplane-tire-makers buying natural rubber, and other manufacturers buying energy, paint, screws, semiconductor chips, etc., so as to turn these “inputs” into final products or “semi-finished goods” they then sell to others. So though tariffs on steel may benefit steel companies, those benefits only come at the expense of chassis-makers and other metal-users; and tariffs natural rubber are pure losses for U.S. manufacturing.

Statistically, the Census’s annual “Profile of Importing and Exporting Companies” release last Tuesday credits manufacturers with $1.2 trillion in imports — over 40% of the total import value they could identify by industry. That suggests last year’s tariff decrees likely hit U.S. manufacturers with $150 billion or so in new costs. So as the tariffs raised prices for the waitresses, teachers, truck operators, and repair-shop mechanics, they also made it more expensive to operate factories in the United States. Thus no industrial boom has materialized.

In sum: So far, legal judgments on the administration’s tariff decrees haven’t been positive. Real-world economic impacts, likewise.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Data:

Census counts U.S. importers and exporters by industry type, company size, etc., as of 2024 (see Table 1d for the importers), and finds that manufacturers are the largest importers.

Legal update:

Plan A: The April 2nd, 2025, “international emergency” decree. Now defunct.

… the Supreme Court’s February 20 ruling striking it down.

Plan A(ii): The June 3, 2025, steel “national security” decree is an exception since it hasn’t so far faced legal challenge and is still in effect.

Plan B: The February 26, 2026, “balance of payments crisis” decree, ruled illegal last week with appeal pending.

… the Court of International Trade’s ruling striking it down last Thursday.

Plan C: The U.S. Trade Representative Office’s “Structural Excess Capacity” investigation, with a gloomy assessment of how “reindustrialization” is going, and a memorably loopy explanation of “Structural Excess Capacity”:

“The Trump Administration’s reindustrialization efforts continue to face significant challenges due to foreign economies’ structural excess capacity and production in manufacturing sectors. Across numerous sectors, many U.S. trading partners are producing more goods than they can consume domestically. This overproduction displaces existing U.S. domestic production or prevents investment and expansion in U.S. manufacturing production that otherwise would have been brought online. In many sectors, the United States has lost substantial domestic production capacity or has fallen worryingly behind foreign competitors.”

PPI’s Gresser testified on the “Plan C” 301 investigation last week. (Quick summary: inconsistent with the statute and a breach of the separation of powers; economically irrational; data unpersuasive and at times irrelevant.)

… and in Monday’s Wall Street Journal (subs. req.)

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT:  “Precious metal” is now the U.S.’ top export.

THE NUMBERS: Gold, silver, and platinum share of U.S. exports, January-February* –

2026	12.70%
2025	4.30%
2024	4.60%
2023	4.70%
2022	4.20%

* USITC Dataweb

WHAT THEY MEAN: 

Asking the Senate for budget money late last month, Howard Lutnick claims the administration’s first-year policy adventures “dramatically reduced the trade deficit, lowered imports, and increased exports to over $3.4 trillion, a 6% increase from 2024.”

Mr. Lutnick’s stats are rarely precise, and no exception here. Four factual claims in twenty words, two of them wrong, two right.

The errors are on imports and balance, and pretty easy to clear up. Each month, the Census Bureau — a branch of Mr. L’s Department! — publishes the official U.S. trade data. Their most recent report shows that imports rose from $4.1 trillion to $4.3 trillion rather than getting “lower.” Vis-à-vis trade balance, the 2025 deficit was down by 0.2% if you combine goods and services, or up by 2.0% if you count goods alone. Reasonable people can debate whether this is “very slightly down,” “a little bit up,” or “essentially the same.” But either way, it isn’t “dramatic.”

The points about export growth are more interesting — factually correct, but in a strange and unsettling way. The figures, if you look at them in a little detail, turn out mainly to be a sharp rise in transfers of precious metal abroad. That in turn suggests less a useful jump in selling things to foreigners than financial unease, fading confidence, and maybe an exotic form of capital flight. Background –

The Census Bureau statisticians say that last year, American exports (goods and services combined) rose from $3.23 trillion to $3.43 trillion. That, as Mr. Lutnick says, is 6%, or more precisely 6.2%. This makes 2025 exactly the 21st-century median year for export growth, and a bit below the long-term 7.2% export growth average since 1960.

In most cases, a modestly higher export number may be dull, but it means Americans are selling more cars, airplanes, and soybeans abroad, getting more software downloads and movie screenings, etc., and/or that prices have gone up a bit. There’s some of both involved in last year’s figures, but neither farm-and-factory goods nor inflation is the main story. About two thirds of last year’s goods export growth — $68 billion of $117 billion — comes not from ships full of grain, LNG tankers, ro/ros stacked with cars, planes delivering semiconductors to waiting factories, and so forth, but the physical shipment of about 260 tons of gold from U.S. vaults under Wall Street, along with 17 tons of platinum and lots of silver, to London, Zurich, and Hong Kong.

Early data for 2026 show this accelerating. Precious metals (HTS 72) typically make up about 4% of U.S. export values, and reached 7% over the course of 2025. By last February — the most recent month for which full data are up on the USITC’s Dataweb — they had reached 15%, overtaking energy, airplanes, agriculture, cars, chemicals, and other big items as the single largest U.S. export. (Yesterday’s Census trade release adds March figures, and appears about the same.) The jump — the St. Louis Fed presents gold shipments as a classic “hockey stick” graph – appears to reflect a combination of (a) higher prices, (b) investors guessing that precious metals may be better bets than stocks or dollars, and (c) central banks “repatriating” assets, likely thinking the U.S. isn’t as safe a place to hold valuable things as was a couple of years ago. A quick table of February’s top exports:

Total February 2026 goods exports	$195.1 billion
Gold, silver, platinum, precious metal products (HTS 72)	$29.4 billion
Energy	$25.2 billion
Chemicals (excluding pharmaceuticals)	$16.0 billion
Agriculture (USDA definition)	$14.7 billion
Airplanes	$12.2 billion
Automotive (vehicles and parts)	$10.0 billion
Semiconductors	$7.0 billion
Pharmaceuticals	$6.9 billion

So Mr. Lutnick was off on imports and balances. He did get export growth right, though, even though most of it seems to be money leaving the country. And he may well be right to say that Trump administration policies are at least in part responsible. As to whether that’s something to boast about …

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Mr. Lutnick testifies at the Senate Appropriations Committee.

… Census’ monthly trade data has some correctives.

… and the St. Louis Federal Reserves “FRED” database has a classic “hockey stick” gold export graph.

Gold background –

Will the U.S. run out of gold? Not likely. The government owns 8,133 tons and so far hasn’t touched it. Also, the U.S. Geological Survey thinks there’s at least 15,000 tons still underground.

The U.S. Mint explains Fort Knox and the U.S. Bullion Depository.

USGS’ summary of gold production, trade, reserves, and uses as of 2025.

The World Gold Council tallies gold reserves by country

… and recaps prices since 2023.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT: Americans rank 4th in the world for median income, 44th for life expectancy.

THE NUMBERS: U.K. “rank” if it were an American state –

Per capita income:	51st
Life expectancy	1st

 WHAT THEY MEAN: 

The gloomier sort of Brit has been muttering for 15 years about income comparisons with the United States. Here’s a sample from the London-based Social Market Foundation last year:

“[T]he UK’s failure to match higher incomes across the Atlantic has drawn particular attention and generated greater concern. Almost a decade ago, observers were suggesting that if the UK were an American state it would be the second poorest … More recently, commentators have used the gap to argue that ‘Britain is a developing country,’ or that the ‘hard working US is getting rich while the UK struggles on benefits.’”

Is the United States really that rich? In some ways, yes:

Statisticians at Our World in Data, scrutinizing World Bank stats on incomes and poverty rates, find Americans earning $72.07 in “international dollars” per person each day. Our World’s “international dollar” isn’t the green one in the wallet, but a hypothetical version that they’ve (a) normalized for inflation, (b) used “purchasing power parities” to avoid currency-valuation-based income skews, and (c) taken a “median” rather than a “mean” average to minimize effects of superwealthy individuals. Their list places Americans 4th among 115 countries. See below for some quibbles — they don’t include a few small high-income countries (e.g., Singapore, Kuwait, UAE, Qatar); some of the gap represents longer U.S. working hours rather than higher pay as such; and (see below) the U.S. fares less well on “wealth” than “income.” But nonetheless, $72.07 per day for the median American is a lot — 32% above the median Brit’s $54.55, 70% above Japan’s $42.10, and five times China’s $13.36. So Americans do indeed earn a lot of money. Here’s a sample of Our World’s findings:

Median daily income, international PPP dollars* –
1. Luxembourg	$89.49
2. Norway	$77.76
3. Switzerland	$72.29
4. United States	$72.07
15. United Kingdom	$54.55
25. Japan	$42.10
58. China	$13.32

So World Cup visitors to the U.S. venues this June may be a little envious of American affluence. Americans shouldn’t be spiking any spherical footballs, though. Here’s a mirror-image U.S.-U.K. comparison from gloomy researchers at Johns Hopkins University in Baltimore:

“Why has the U.S. fallen behind in health? … Forty years ago, babies born in the U.S. and the U.K. could expect to live to the same age. Today, however, life expectancy is several years shorter on our side of the Atlantic Ocean. What’s going on? In a new analysis of 2023 data from the U.S. and England and Wales, this report finds that differences in four preventable causes of death can explain the entire 2.7-year gap in life expectancy: cardiovascular disease, overdose, motor vehicle crashes, and gun violence.”

So if Americans might earn more money, they have less time to enjoy it. The Centers for Disease Control’s most recent life-expectancy report takes the data through 2024, and finds Americans expecting 79 years at birth. This represents full recovery from the COVID pandemic drop and closes a bit of the transatlantic gap, but still leaves Americans fully two years below the U.K.’s 81-year life expectancy. Flipping the Social Market Foundation’s Brits-at-the-bottom premise, the U.K. would likely tie for first with Hawaii among American states for life expectancy. On a world scale, the World Bank’s full span of cross-country life expectancy comparisons, all from 2024 and excluding micro-states, tax havens, and small dependencies, places the U.S. 44th. Another short table, with more complete stats below:

 

Japan	84 years
Australia	83 years
UK	81 years
U.S.	79 years
China	78 years

 

A $72.07 vs. $54.55 daily earnings gap is the equivalent of $6,400 a year. If asked whether they’d sacrifice that to get two more years of life, lots of Americans would probably accept.

Why the difference? Drawing from the JHU report and KFF analysis, the life-expectancy divide appears (a) mainly related to public health and social issues, and (b) possible to close. Two ways to look at this:

1. Causes: Kaiser Foundation researchers point out two big contributors to the gap:

i. Homicides and drug overdoses: About a quarter of the gap vis-à-vis America’s European and Asian peer economies — about six months’ worth of life — reflects higher U.S. rates of firearm crimes and drug overdoses. America’s homicide rate, at 5.8 per 100,000 people annually, compares poorly to Poland’s 1.0 homicides per 100,000 people, the U.K.’s 1.2, and France’s 2.3. Across the Pacific, Singapore’s 0.1 homicides per 100,000 people is the world’s lowest rate, with Japan’s 0.2 and China’s 0.5 not much higher. Likewise, KFF reports that the U.S. rate of death from drug overdoses and alcohol poisoning (as of 2023) was 29 per 100,000 people, about six times the 5 deaths per 100,000 people rate in other high-income countries.

ii. Heart and lung diseases: Most of the rest, about a year’s worth, reflects higher U.S. rates of lung and heart diseases in middle and old age. Here, the main issues appear to be diet, obesity, smoking, and exercise rates.

2. Disparities: The U.S.’s 79-year expectancy is a national median. CDC statisticians haven’t completed their analysis by states and regions, and by race and ethnicity, for 2024, but earlier years are suggestive. As of 2022, state life expectancies varied by eight years, from West Virginia’s 72 years to the European-standard 80 years in Massachusetts and Hawaii. By race and ethnicity (as of 2023), the range is wider still: 70 years for Native Americans, 74 years for African Americans, 78 years for white Americans, a European-standard 81 years for Hispanics (including 82 for Puerto Ricans), and a world-standard 85 years for Asian Americans.

So: The causes are complex social and policy problems, but not totally intractable. The U.S. homicide rate peaked in the 1980s at 11.6 per 100,000 and has since fallen by half. Drug overdose deaths, meanwhile, peaked early in 2023. As treatment has grown more easily available and public awareness campaigns have become more effective, overdose deaths have dropped about 40%. Gaps between states likewise suggest that local policies can have large impacts.

And as far as doleful cross-country comparisons go, Americans are high earners. Doubtless, there are things others can learn from us on that. There’s a lot we can learn as well.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

U.S./U.K.

Speaking to Congress yesterday, King Charles reflects on the U.S.-UK alliance past and present. (Or video via C-SPAN.)

The London-based Social Market Foundation analyzes high American incomes.

While Johns Hopkins University researchers in Baltimore reflect on long British lives.

How rich is America? 

Our World in Data tracks daily income and consumption by country, finds Americans super-rich.

Much the same in the OECD’s table of PPP-based median incomes.

The World Bank’s Gross National Income per capita table has a more complete list of countries.

And UBS’s 2025 Global Wealth Report offers a different perspective. This tries to estimate median “wealth” — that is, the value of someone’s property, savings, and belongings, minus debt — as opposed to income. Their results for Americans don’t quite glitter like the income data: Americans average $124,000 in per-adult wealth, and rank 15th in the world, noticeably below 8th-place Britain’s $176,000. Setting aside tax-haven Luxembourg’s $395,000 as anomalous, UBS reports Australians to be the world’s richest people, with $268,000 in wealth per adult.

Why so short-lived?

CDC on U.S. life expectancy (as of 2024).

… by state (2022).

… by race and ethnicity (2023,

The Kaiser Foundation has data on U.S.-v.-peer life expectancy gaps.

… and their origins.

For broader context, the World Bank’s full table has life expectancy at birth for 270 countries, territories, and regions. Two European micro-states — Monaco and San Marino — lead the ranking with 86-year life expectancies. Chad and Nigeria are lowest on the table, both with 55. A representative list:

Japan	84 years
Sweden	84 years
Spain	84 years
France	83 years
Italy	83 years
Korea	83 years
Australia	83 years
Canada	82 years
Germany	81 years
UK	81 years
Chile	81 years
High-income average	80 years
Albania	80 years
United States	79 years
China	78 years
Jordan	78 years
Thailand	77 years
Brazil	76 years
Ukraine	75 years
Mexico	75 years
Vietnam	75 years
World average	73 years
Russia	73 years
India	72 years
Senegal	69 years
Pakistan	68 years
Fiji	67 years
South Africa	66 years
Low-income average	65 years
Central African Republic	58 years
Chad	55 years
Nigeria	55 years

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT: Schools can get much better.

THE NUMBERS: Mississippi 4th-grade reading scores, compared to national averages –

2024	+4
2022	+1
2017	-6
2011	-11
2007	-12
2000	-14

WHAT THEY MEAN: 

Next month, Mississippi’s 235 high schools will send 28,000 graduating seniors off carrying their diplomas to first jobs, military service, college dorms, gap years, etc, and adult life. The 28,000 figure represents a 90.8% graduation rate, the highest in Mississippi history and one of America’s 10 highest. By contrast, when this spring’s grads arrived in kindergarten in 2012, Mississippi’s graduation rate was 75%, tied with Alabama for the country’s 6th-lowest rate. What has happened? And what might school-watchers learn from it?

Offering lessons drawn from her two decades of hands-on experience with Mississippi school reform, PPI Education Director Rachel Canter argues in PPI’s newest research paper that to make American schools a lot better, reformers should avoid hoping for miracles. They should run marathons instead. Background, and then some conclusions:

Every three years since 2000, the U.S. has joined 37 other OECD members, and 57 other interested governments abroad, in the Programme for International Student Assessment (“PISA” for short). Every three years, PISA tests 5,000 15-year-olds in each participating country on reading, science, and math, and then publishes assessments of student achievement that governments, parents, and educators can compare both over time and among countries. The data span some big U.S. national education reform efforts — No Child Left Behind, Race to the Top, Common Core — and, a little dishearteningly, show American school performance staying about the same. The newest results are from the 2022 tests — 2026 figures arrive in September — and almost perfectly match the oldest:

Year	Reading	Math	Science
2022	504	465	499
2018	505	478	502
2012	498	481	497
2009	500	487	502
2000	504	493	499

PISA’s rankings of American students vis-à-vis foreign countries are a little more variable than their scores, but tell a similar story. Just as U.S. school performances typically show New England at the top, the Deep South and Southwest at the bottom, and the others in between, each PISA comparison has put East Asian schools — Singapore, Hong Kong, Japan, Taiwan – first, with Canada and some smaller northern European countries (Estonia, Switzerland, Ireland) a shade below. U.S. students usually score a bit above the world median and a tier below the best performers. Since 2000, they’ve placed in a range from 8th to 17th in reading, 25th to 30th in math, and 10th to 20th in science. The U.S.’ best-ever ranking was 6th in reading in 2022, not because that year’s American teens improved on their elders’ performance, but because foreigners’ pandemic scores fell more sharply than America’s. In essence, U.S. schools get a sort of “B-” average, sustained with little change throughout the 21st century.

This sort of result can lead to fatalism and passivity. If big national efforts don’t change outcomes much, and what matters instead are locality and family commitments (or even more dispiriting, amorphous cultural or historical factors), why bother?  But Canter’s in-depth review of Mississippi’s reading progress shows that fatalism is wrong.

Outside stereotypes of Mississippi mix high culture and outsized historic impact – Faulkner and Welty, Delta blues, the civil rights movement — with low incomes, social stratification, outmigration, poor health, and white flight from public schools. School outcomes before 2010 didn’t do much to disprove this, generally placing Mississippi in the bottom five, if not 49th or 50th. But this spring’s graduates are leaving a school system very different from the one they joined in 2012. Mississippi’s reading ranking, for example, is up to 9th nationally — best in the south and at par with Connecticut and Utah — and Canter notes that “normalizing” data for family income would put Mississippi’s teenage readers first in the country.

How did this happen? Canter objects to the commonly used term “Mississippi miracle”. (A “miracle” implies divine intervention, or some unexpected flash of insight enabling rapid and easy change, and little actual work.) Instead, she attributes Mississippi’s schooling rise to a long “marathon” of stable and essentially non-partisan policy basics, dutifully implemented over a period of years. Her list of “policies” is shorter than the description of their steady implementation in practice:

• A reading competency law in 2013 that required holding back students who don’t pass a reading exam, along with special help for struggling students

• Support for teachers in understanding and using better practices, like scientifically based reading instruction

• Annual “A to F” grades for schools based on student achievement, with state intervention in schools at the bottom.

In sum: Using the “marathon” metaphor, over the life of one school cohort — from their arrival as kindergarteners in the autumn 15 years ago, to the spring morning when they break the tape as graduates — Mississippi’s schools got much better.

So: As Mississippi’s May grads flip their tassels, tired school reformers should take heart from their story. Mediocre schools can, in fact, become very good, and good ones can become great.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Mississippi Marathon:

PPI’s Reinventing America’s Schools project.

PPI’s Rachel Canter explains the “Mississippi Marathon” in the Atlantic (subs. req.).

… and provides the full picture at PPI.

Canter’s Mississippi First nonprofit advocates for education reform, reading programs, and public charter schools. (PPI note: The name dates to 2008, and has no relationship to current administration slogans.)

And the Mississippi Education Department.

U.S. data:

The Education Department’s “National Education Report Card” has maps with state-by-state rankings and scores for reading, math, and science.

… and from the same source, a look at Mississippi schools’ changing fortunes, 1992-2024.

Good examples abroad:

The OECD’s Programme for International Student Assessment has data and analysis of school performance in the 38 OECD member countries, plus 57 “partner” countries also joining the PISA assessments.

Singapore topped the last PISA rankings in 2022. The Education Ministry reviews the elementary school curriculum.

Estonia gets Europe’s highest scores. Education Estonia explains.

Japan places the highest among large-population countries. The U.S.-based National Center on Education and the Economy has an enthusiastic review.

Ireland’s National Council for Curriculum and Assessment.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT: Trump administration tariffs haven’t achieved their goals.

THE NUMBERS: Manufacturing share of U.S. GDP –

2025	9.40%
2024	9.80%
2016	10.80%

WHAT THEY MEAN: 

Every March for the last half-century, per the Trade Act of 1974, the staff at the U.S. Trade Representative Office has written up a formal report on the administration’s trade goals for the coming year, entitled “The President’s Trade Agenda,” and sent it to Congress. A month later, the two Congressional Committees responsible for trade policy — Ways and Means in the House, Finance in the Senate — fetch them up for a public hearing to explain it. Last year’s hearings, a week after the Trump administration’s April 2 International Emergency Economic Powers Act (IEEPA) tariff decree, were a bit rocky. They did, though, extract an explanation of what the administration wanted the decree to do. Here’s Amb. Greer:

“The deficit [i.e., trade balance] needs to go in the right direction. Manufacturing as a share of GDP needs to go in the right direction.” 

A year later, tariffs are deeply unpopular, and the Supreme Court has demolished the April 2 decree and its seven “IEEPA” companions. Nonetheless, the administration has kept a jury-rigged high-tariff system in place through claims of a “balance of payments crisis” and constantly shifting Commerce Department “national security” decrees. Yale BudgetLab calculations estimate that the average U.S. tariff rate is 11.8% this week — down from a 19% peak last summer, but still nearly five times the 2.5% average of January 2025. The administration’s pitch to the Committees last year was that even if tariff decrees imposed “some pain” on families — two-dolls-per-girl rations, broader price increases, etc. — and damaged the Constitutional separation of powers, the benefits of a lower U.S. goods-trade deficit and a relatively larger manufacturing industry would outweigh the harms.

With Amb. Greer’s return engagements coming up — likely next week — how is it working out? Trade balance and GDP shares are secondary and tertiary stats, and not necessarily the right measurements of success. (As an example, very rapid growth in digital industries would mean the GDP shares of the other sectors shrink even if they’re all doing fine.) Many would prefer examining trade policy’s contributions to primary indicators like economic growth, job creation, stable prices, and low unemployment. But balance and GDP share are at least specific and measurable. Here’s a look at how the trade balance and the manufacturing share of GDP have changed, set against “pain” and Constitutional questions:

1. Trade balance: Not yet clear. The trade-balance stats for 2025 and 2024, with 2016 — the Obama administration’s final year, before the first Trump administration’s tariff increases in mid-2018 – added as a longer-term comparison, look like this:

	2016	2024	2025
Goods and services	-$479 billion	-$904 billion	-$901 billion
Goods only	-$750 billion	-$1,215 billion	-$1,241 billion
Manufacturing only	-$647 billion	-$1,202 billion	-$1,236 billion
Trade balance/ GDP ratio	2.7%	3.1%	3.0%

Census for goods/services and goods balances; BEA’s GDP database for trade balance/GDP ratio; U.S. International Trade Commission Dataweb for manufacturing-only balance (NAICS basis).

So, not much change. The 2025 deficit was about the same as that of 2024, and larger than that of 2016. (PPI note: Comparing dollar-value trade balances over long periods of time is usually misleading, as the figures don’t account for inflation and GDP growth. For 2016, the GDP ratio is best.) On Amb. Greer’s side, though, Census’ monthly figures might be trending down: up sharply in early 2025 as businesses rushed to get low-tariff goods in before tariffs rose; back down by summer as inventories filled; and a few more downward than upward spikes since then.

2. Manufacturing share of GDP: Down. The manufacturing share of U.S. GDP fell from 9.8% of GDP in 2024 to 9.4% in 2025. Job figures concur — manufacturing hiring fell by about 400,000 in 2025, and factories shed 108,000 jobs on net. Conclusions after one turbulent year might be premature, but in 2016 the manufacturing share of U.S. GDP was a lot higher – 10.8% – so post-2017 tariff increases haven’t lifted it. This shouldn’t be a surprise, as U.S. manufacturers are some of the country’s largest importers – Census finds them buying $1.2 trillion of $2.9 trillion in known goods imports in 2024 (latest year available) – and are presumably now carrying some of the heaviest Trump tariff burdens.

Overall, last year’s GDP-share trend looks like the one you’d expect from a general tax on purchases of physical goods. BEA data show the shares of mining, construction, manufacturing, restaurants, and retail all down a bit, and that of agriculture flat, while the corresponding shares of financial services, legal services, information industry, and health grew. So as tariffs raised goods costs, manufacturers, along with other big goods-buyers, shrank relative to industries that spend relatively less of their money on physical goods, and more on services and investment.

3. How much pain? Mr. Trump’s 2024 platform promised to “defeat inflation and quickly bring down all prices.” Tariffs, by contrast, are meant to raise prices, and that’s happened. Harvard Business School’s tariff price tracker follows prices for a basket of tariffed goods and similar domestic goods. It finds that the tariffs have raised prices by about 7.0% above trend rise for the imported things, 4.6% for the domestic substitutes, and 0.8% across the entire goods-and-services economy. Federal Reserve economists concur. Spread across families, a Joint Economic Committee calculation finds this has cost families about $1,750 per household on average.

4. And the Constitution? Returning to USTR’s report, the 2026 version of the “President’s Trade Agenda” report has a startling second line: “[T]he Constitution is our most important trade agreement.” If so, the Trump administration has a big trade-agreement compliance problem. Article I’s first “enumerated power” – “Congress shall have power to lay and collect Taxes, Duties, Imposts, and Excises” – is pretty clear. So is the third sentence, assigning Congress the power to “regulate Commerce with foreign Nations.” If a president can set new tariff rates at will by declaring emergencies, and can conclude ‘deals’ with foreign countries altering both U.S. tariff rates and U.S. regulations without Congressional approval or negotiating objectives, do these clauses mean anything?

The Committees have lots to ask about next week.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Documents:

The Constitution; see Article I, Section 8, for authority over tariffs and trade regulation.

USTR’s “President’s Trade Agenda” reports for 2026 and 2025.

The White House’s April 2nd, 2025, “IEEPA” decree.

The Supreme Court’s Feb. 20, 2026 Learning Resources v. Trump opinion striking it down, along with the IEEPA decrees related to India, fentanyl, Brazilian court cases, etc.

The White House’s February “Balance of Payments Emergency” decree, currently in effect but under court challenge.

And the Commerce Department backs away from its August attempt to define condensed milk and balance beams as “steel or aluminum derivative products”, but raises tariffs on a lot of appliances and other metal things instead.

Data:

Census’ monthly FT-900 trade data reports have exports, imports, balances, etc., through February 2026.

BEA’s GDP figures (and use “GDP by Industry” for manufacturing specifically),

Yale BudgetLab calculates tariff rates.

Harvard Business School professors track price increases.

Fed economists report similar results last week.

Public:

A February Trade Fact takes a deep dive into trade and tariff polling over 2025 and early 2026. Summary: As Amb. Greer spoke to the Committees last April, a broad average across polls suggests that the public opposed Mr. Trump’s tariff decrees by about 60% to 35%, and little has changed since.

And a last look back at the IEEPA decrees:

As a tax matter, in the end, the administration’s eight “IEEPA” tariff decrees raised “negative $4 billion” in revenue and arguably “negative $9 billion.” Though Customs and Border Patrol’s “Trade Statistics” page still mournfully says buyers paid $166 billion in the IEEPA tariffs, CBP now has to pay all it all back with interest  By PPI Fiscal Policy Analyst Alex Kilander’s calculations, the decision to defend the IEEPA decrees all the way to the Supreme Court means at least $4 billion in extra liability for taxpayers. Here’s why:

The administration lost its IEEPA case at the Court of International Trade on May 28, 2025. The decision to appeal this all the way to the Supreme Court appeals stretched the litigation out until February 20, 2026. That would be 268 days. As the IRS explains, ordinary Treasury borrowing pays about 4% interest (a rough average; longer-term T-bills pay higher rates than shorter-term), but interest on mistakenly or illegally collected money costs 7%. Anyone who has contemplated buying a house feels intuitively uneasy seeing that sort of spread. Kilander has the formula:

T-bill borrowing rate proxy:	$166 billion * (1 + 0.04/2)2*0.75  =	$171 billion
Tariff refund with interest:	$166 billion * (1 + 0.07/365)365*0.75  =	$175 billion

In sum, the administration’s 268 days of litigation meant an extra 3% interest on its borrowing. Assuming spending patterns remained the same, that means they (more precisely, “we,” as taxpayers) are out $175 billion, an extra $4 billion. Or, had it decided to scale back the ‘reconciliation bill’ after the Court of International Trade loss and not borrow the $166 billion at all, we would have saved $9 billion.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT: U.S. Customs blocks about $0.8 billion worth of goods a year on suspicion of ‘forced labor.’

THE NUMBERS: For 2021 –

World goods exports	$22.290 trillion
U.S. goods imports	$2.849 trillion
Illegal profit from industrial and agricultural forced labor*	$40 billion
US imports blocked by CBP for suspected forced labor content	<$1 billion

* International Labour Organization estimates, 2024. “Industry” includes manufacturing, mining, construction, and utilities.
** CBP statistics.

WHAT THEY MEAN: 

The Treasury Secretary, Scott Bessent, explains the Trump administration’s plan to replace its 2025 International Emergency Economic Powers Act (IEEPA) tariff decrees with new ones using different laws:

“Six Justices … ruled that IEEPA authorities cannot be used to raise even one dollar of revenue. This administration will invoke alternative legal authorities to replace the IEEPA tariffs. We will be leveraging Section 232 [a “national security” law run by the Commerce Department] and Section 301 [see below] tariff authorities that have been validated through thousands of legal challenges. Treasury’s estimates show that the use of Section 122 authority, combined with potentially enhanced Section 232 and Section 301 tariffs, will result in virtually unchanged tariff revenue in 2026.”

Six weeks later, Bessent’s neighbors at the U.S. Representative Office have now duly launched two “Section 301” cases. The first, on “Structural Excess Capacity,” says manufacturing industries in 16 trading partners are too big. (Our view in short: it’s neither economically nor legally serious, and has an inappropriate acronym.) The second charges that the top 60 U.S. trading partners — from the European Union to the Bahamas — are hurting America’s economy by failing to sufficiently combat trade in goods produced by forced labor. This one also seems legally shaky, but at least identifies a real phenomenon and moral challenge. Some observations:

U.S. law has barred imports of goods made by prisoners since the “McKinley Tariff” of 1890. (Though at least one U.S. prison routinely exports goods made by inmates; see below.) The 1930 Tariff Act (“Smoot-Hawley”) then banned imports of goods made with forced labor, unless buyers could show there was no available U.S. substitute. Most recently, an Obama-era law passed in 2016 banned any imports of goods with a “reasonable suspicion” of forced labor content. In sum, for the past decade the U.S. has banned all forced labor imports.

“Section 301,” a trade law dating to 1974, allows U.S. administrations to identify “an act, policy, or practice” of a foreign government which is in some way “unreasonable or discriminatory and burdens or restricts U.S. commerce,” and gives them a right to use tariffs as a negotiating tool to fix the problem. USTR’s argument for using it here runs as follows: (a) many foreign countries lack a law banning imports of goods made with forced labor like America’s, so (b) they may be incorporating forced labor goods as inputs to their manufacturing industries, which (c) might allow them to produce goods more cheaply than similar American stuff, and therefore (d) this would justify a U.S. tariff to offset this supposed advantage.

1. Law: As a legal matter, then, their argument is that the absence of a particular policy — a law similar to America’s — is the same as actually having the requisite unreasonable policy. This sounds like a stretch, but courts will decide.

2. Economics: USTR’s Federal Register Notice announcing the investigation doesn’t offer evidence that countries on its list are buying any forced labor goods, but says that “none of these countries has adopted and effectively enforced a forced labor import prohibition to date,” and this “may negatively affect U.S. commerce.” How much, then, can we really know? Reliable facts on forced labor are scarce — as is typical of criminal enterprises — but international research and U.S. data both suggest that the scale of forced-labor trade is probably small.

* International evidence: International Labour Organization reports in 2022 and 2024 (which USTR uses as points of reference for its “301” investigation), say that 27.6 million of the world’s 3.22 billion workers were in various forms of forced labor as of 2021 — most commonly, people trapped in jobs when executives withhold pay or confiscate passports. This includes 8.4 million in “industry” (by which the ILO means manufacturing, mining, utilities, and construction), out of an 800-million worldwide total, and 2.1 million of 916 million farm and agriculture workers. They say forced labor is “highest in severity and scale” in “informal micro- and small enterprises operating at the lower links of supply chains in high-risk sectors and locations,” and that with respect to trade destined for wealthier countries, forced labor is likely most common in “raw materials production in the lower tiers of supply chains of consumer goods.”

“Illegal profits” from forced labor, the ILO researchers believe, totaled $236 billion in 2021. About three-quarters of this – $172 billion – came from sex trafficking. Forced-labor profits “industry” totaled $35 billion, and from agriculture $5 billion. The ILO doesn’t speculate on how much of the combined $40 billion came from purely domestic sales and construction contracts, and how much from exports of goods. But in an extreme case, if all of the $40 billion came from goods exports, about 0.2% of the world’s $22.3 trillion in 2021 goods exports would contain some forced labor content. As to effects on trade flows, if forced-labor businesses sold at market prices and pocketed the full $40 billion in profits at the expense of exploited workers, there wouldn’t be a price effect or a “burden on commerce,” but it seems likely that they would sell somewhat cheaper, losing some profit but gaining illicit market share.

* American data: Since passage of the 2016 law, CBP has imposed 55 “Work Release Orders” to block imports of goods worth $3.08 billion, or about $400 million a year. Seizures under a second law, the Uyghur Forced Labor Prevention Act, were about the same. Annual U.S. goods imports during this time averaged a bit above $3 trillion, so the combined $0.8 billion in seizures would be about 0.03% of U.S. import value. Meanwhile, as former U.S. trade/labor negotiator Desiree LeClercq notes, neither the 1930 nor the 2016 law actually bans export of U.S.-made goods produced with forced labor. DHS reporting, for example, shows that 5% of forced labor prosecutions in the United States show up in agriculture, and an unstated but non-zero number in manufacturing, so some U.S. exports to other countries may also contain forced-labor content.

In sum, international research and U.S. data do suggest that some products flowing between countries are made by coerced workers. But the total is likely small relative to trade flows or U.S. industry — and to the $166 billion IEEPA tariffs Bessent wants to restore. And again, the USTR hasn’t provided evidence that countries on its 60-partner list are knowing (or even unwitting) buyers. Nor for that matter is the U.S. law necessarily the world’s best: LeClercq argues that the European Union’s forced labor policy, set to enter into force next year, is better than America’s, since its program does ban exports of European goods made with forced labor, and has stronger due process rules on import cases.

3. Conclusion: International trade isn’t the core forced labor problem, and forced labor likely has only a modest influence on trade flows. But a systematic program to reduce the amount of forced labor worldwide — including keeping forced-labor goods out of the U.S. and forced-labor U.S. goods out of world markets, as will as improving laws and compliance elsewhere — would be admirable regardless of the problem’s scale. And if the administration wants ideas for such a program, it needn’t look far: the Biden administration actually ran one, combining USAID and Labor Department project support with CBP enforcement programs, diplomacy, and trade negotiations.

Bessent’s comments, though, indicate that the Trump administration simply plans to use forced labor as a pretext to recreate the IEEPA tariffs, just as its first IEEPA decrees in 2025 used fentanyl deaths as a pretext for tariffs on Canadian and Mexican goods. This isn’t admirable. And if courts take Bessent at his word, they may conclude that the investigation is an illegal use of Section 301, meant not to address a “burden on U.S. commerce” but to bypass Congress and create a new tariff system by decree. As we’ve said before, the Constitution gives Congress, not presidents, the power to set tax rates, including tariffs. If the administration wants a higher tariff rate, it should simply follow the Constitution and ask Congress to pass a bill.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Treasury Secretary Bessent (Feb. 20) says 301 cases will replace “IEEPA” tariffs.

U.S. Trade Representative’s March Federal Register Notice announcing “Section 301” investigation of forced labor laws.

And the “Section 301” text.

Compare & contrast:

The Biden administration reviews its four-year program against forced labor and human trafficking.

International research and data:

The International Labour Organization studies the scale of forced labor as of 2021.
… and the profits drawn from it.

U.S. data and policy:

CBP’s reports on Work Release Orders since 2017.

… similar data on Uyghur Forced Labor Prevention Act seizures.

And LeClercq’s critique of U.S. law notes a lack of due process and spotty enforcement. Her close:

“Like its other Section 301 investigations, USTR is inviting public comments before making its determination. I hope the CBP’s lax evidentiary standards, weak procedures, and questionable commitment to enforcement, along with U.S. forced labor practices, come to light. The U.S. administration must fully reckon with these deficiencies before imposing U.S. models on the world.”

And two U.S. stories:

An Atlanta Journal-Constitution report (2022) on an agricultural forced labor case involving onion and blueberry farming in Georgia. It’s not clear whether the produce was for strictly domestic sale or involved exports as well.

And in regard to prison labor: Eastern Oregon Correctional Institution inmates make denim jeans and shirts — “Prison Blues” — and market them in Europe and Asia via distributors in Japan, Germany, and the Netherlands. PPI editorial note: This isn’t necessarily bad — voluntary, paid, and regulated prison work can help inmates develop work habits that ease reintegration to society — but an embarrassing contrast to U.S. import policy.

FACT: U.S. gasoline prices rose from $2.98 to $4.02 per gallon last month.

THE NUMBERS: Price increases since late February –

Crude oil	90%
Polyethylene (plastic base)	37%
Gasoline	36%*
Urea (fertilizer base)	12%

* American Automobile Association (AAA) calculations for the United States, regular grade.

WHAT THEY MEAN: 

Named for a medieval Arab kingdom famous enough for its 17th-century wealth to serve as a chapter headline in Paradise Lost, the Strait of Hormuz connects the mostly land-locked Persian Gulf to the open-water Gulf of Oman and the Indian Ocean. A look at the implications, and the impact to date, of its closure:

1. Geography: The Strait is one of 24 narrow, heavily traveled ocean channels (“maritime chokepoints”) supply-chain analysts identified in Nature last November as posing special global-economy risk from natural disasters, shipping accidents, pirate attacks, and conflicts. Shaped like an upside-down “U,” it is about 110 miles long and 30 miles wide — Iran’s Bandar Abbas port on the north, Oman’s Musandam governate on the south — and 200 meters deep. A large ship needs about two hours for the transit.
2. Use: The Strait is the maritime outlet for nearly all the energy the four small Gulf monarchies (Kuwait, Qatar, Bahrain, and the United Arab Emirates) produce, and for about 90% of Iranian and Iraqi output. About 100 vessels a day transited last year, like cars on a highway, with incoming ships using a two-mile-wide northern “lane” near Iran and outgoing vessels a similar “lane” on the southern side. Container ships and roll-on/roll-off vessels ferry in consumer goods and cars, while oil tankers and bulk carriers carry out aluminum, fertilizer, crude oil, and natural gas. Tanker traffic usually totaled about 35 vessels per day, carrying an average of 40 million barrels of oil to customers abroad. A table of energy exports drawn from World Trade Organization data covers more than crude and LNG, but gives a sense of scale:

 

World Fuel Exports, 2024	$3,122 billion
Via Strait of Hormuz	$592 billion
United Arab Emirates	$286 billion
Iraq	$100 billion
Qatar	$78 billion
Kuwait	$69 billion
Iran	$47 billion
Bahrain	$12 billion

 

3. Disruption: Persian Gulf energy mainly goes to Asian customers — India, China, Japan, Korea, Taiwan, ASEAN members — with Europe and a smaller buyer, but the market disruption affects the world. As one illuminating data point, insurance for a Strait transit was about 0.2% of the value of a tanker last winter, and is now said to be 4% to 10%. In practical terms, that would mean insurers were charging shipping lines about $200,000 for a transit a month ago, and now $4 million to $10 million.

Since the Trump administration opened its campaign at the end of February, Strait transits have dropped by about 96%, and tanker transits appear to be running at one or two per day. This implies about 280 million “barrels” of oil taken out of the world market, or roughly 20% of the worldwide oil supply. With a sudden contraction in energy supply, and no change in Asia’s need for it, prices have risen fast. Crude oil jumped from $55 per barrel at the end of February to about $100 per barrel by mid-March, and stayed there.

4. Prices: As crude oil prices rise, refined fuels and petroleum-based manufactured goods — plastics, synthetic fabrics, dyes, and some chemical fertilizers — follow them up. Crude oil costs are half the cost of gasoline, where prices are especially easy to track, and markets respond quickly. According to the American Automobile Association, U.S. gas prices averaged $2.98 per gallon (for “regular” quality gasoline) the week before the war, and topped $4.00 yesterday. Using this morning’s $4.06 average, the near-doubling of crude oil prices has now raised gas prices by more than a third. Diesel prices are up a bit more, by 45%, to a $5.38 average. Sustained for a year, this would cost a middle-income family about $950 (assuming no change in driving habits), a bit more than their spending on “personal care products” like soaps, makeup, and shaving supplies. The common use of petroleum in these things – paraffin wax in lipstick, skin creams, plastic packaging — means their prices will be rising too.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Straits: 

In Nature last November, supply-chain analysts Jasper Verschuur, Johannes Lumma, & Jim Hall review risk premiums at 24 maritime chokepoints, including the Straits of Hormuz, Taiwan, Dover, and Malacca; the Suez and Panama Canals; the Bab al-Mandeb, the Windward Passage, etc. They think Russia, Central Asia, and the Middle East are especially vulnerable to chokepoints, the U.S. and Western Europe are less than most, and China and Japan are in the middle.

Lloyds Intelligence has an eye-catching graph of day-by-day transits since January 1.

And the U.S. Naval Institute looks at ship transits, missile strikes, and risk premiums.

Country perspectives:

Oman’s Foreign Ministry, watching from very close, offers analysis.

Pakistan’s Foreign Ministry is the current intermediary.

And a mid-March 35-country policy statement from the UK, France, Germany, Italy, the Netherlands, Japan, Canada, et al.

Food:

The Strait carries not only energy, but about 30% of world fertilizer trade. Carnegie Endowment scholars Noah Gordon and Lucy Corthell assess the implications of Strait closure for fertilizer and food production.

…while U.S. Farm Bureau officers fear yet another shock to American agriculture.

Energy:

AAA tracks gasoline prices.

The Energy Information Administration (a DOE branch) explains the role of crude prices in consumer gas costs.

And for those wanting details, the Bureau of Labor Statistics’ Consumer Expenditure Survey explains American spending patterns. They say that America’s literal “middle class” — the 27 million households in the third, or middle, of five income quintiles — earned on average $74,474 in 2024. (Most recent year for which data is available.) Gasoline and other vehicle fuels cost them $2,645. If they don’t scale back, driving a 36% price increase sustained for a year would cost them about $950. Here’s where gas fits into the budget:

Income	$74,474
Tax payments:	~$4,662
Savings	~$2,912
All spending	$66,900
Home/apartment	$15,257
Food (not including restaurants):	$5,820
Health expenses	$5,676
All non-food/housing/health spending	$40,147
Restaurants (“food away from home”)	$3,277
Entertainment	$2,764
Gasoline/other auto fuel	$2,645
Clothes	$1,642
Personal care products (e.g., soap, makeup)	$892

* Tax payments are estimated based on the results in 2023, as the BLS hasn’t yet published a 2024 figure. The third-quintile family’s 2023 tax payment averaged $4,451, including federal, state, local, and property taxes. This was 6.3% of that year’s $71,507 mean income. The $4,662 above assumes that taxes accounted for the same 6.3% share in 2024.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

FACT: Transparency International: U.S. government perceived as increasingly corrupt

THE NUMBERS: U.S. worldwide ranking in Transparency International’s annual “Corruption Perceptions Index”* –

2025	29
2015	16
2005	17
1995	15

* The 2025 Index places the U.S 29th among 182 countries and territories. By comparison, the U.S. placed 16th among 180 in the 2015 Index, and 15th among 159 in the 2005 Index. The 1995 edition was the first and had only 41 countries and territories.

WHAT THEY MEAN: 

From the D.C. Circuit Court opinion a week ago Friday, quashing the Trump administration’s attempt to indict Federal Reserve Chairman Jerome Powell:

“The case asks: Did prosecutors issue those subpoenas for a proper purpose? The Court finds that they did not. There is abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair who will. On the other side of the scale, the Government has offered no evidence whatsoever that Powell committed any crime other than displeasing the President. The Court must thus conclude that the asserted justifications for these subpoenas are mere pretexts.”

The subpoenas (ostensibly about renovation costs for the Fed’s D.C. headquarters, but really, the Court concludes, an attempt to coerce the Fed on interest rate policy) are — or “were,” assuming the opinion holds — one in a series of Justice Department attempts to charge prominent administration opponents and critics. Other recent ones include Fed Governor Lisa Cook, six Members of Congress, ex-FBI head James Comey, and the New York Attorney General. So far, all have failed. They’re probably leaving a mark on America’s reputation, though. One way to judge this –

Each spring since 1995, the international corruption-monitoring NGO Transparency International has published a “Corruption Perceptions Index,” which ranks most of the world’s governments for perceived corruption. Their Index uses 13 international surveys done by academics, consultancies, international organizations, and other up-close observers of government, each asking about various forms of corruption: bribery, officials using their jobs for personal gain (including political as well as financial), whistle-blower protection, crony capitalism (“state capture by narrow vested interests”), and so on. The collated survey results produce a country’s “corruption perception score,” ranging from a theoretically most corrupt “zero” score to the cleanest possible governance at 100. The current method, yielding comparable numbers over time, goes back to 2012. Its highest-ever scores were the “91” ratings for Denmark and New Zealand in the mid-2010s, and its lowest was last year’s “8” for South Sudan.

TI’s releases are rarely upbeat. The newest, out last month and covering the year 2025, is especially gloomy:

“The global order is under strain from rivalry among major powers, and dangerous disregard for international norms. Armed conflicts and the climate crisis are having a deadly impact. Societies are also becoming more polarised. To meet these challenges, the world needs principled leaders and strong independent institutions that act with integrity to protect the public interest. Yet too often, we are seeing a failure of good government and accountable leadership. In many places, leaders point to security, economic or geopolitical issues as reasons to centralise power, sideline checks and roll back commitments to internationally agreed standards — including anti-corruption measures. Too often, they treat transparency, independent scrutiny and accountability to the public as optional.”

This Index edition covers 182 governments, and puts Denmark, Finland, and Singapore at the top with respective “scores” of 89, 88, and 84. Venezuela, Somalia, and South Sudan are at the bottom, with 10, 9, and 9; South Africa, Trinidad, and Vietnam define the middle at 41. To select a bright spot, TI credits 11 countries with steady improvement over time: Estonia, Korea, Bhutan, and Seychelles as building from relatively good starting positions, and Albania, Angola, Cote d’Ivoire, Laos, Senegal, Ukraine, and Uzbekistan as rising steadily from lower initial scores. Their view of the U.S., though, is bleak. Not only is the American government’s image eroding, they say, but its recent policy choices are having systemic impacts beyond American borders:

“The United States sustained its slide to its lowest-ever score. While the full impact of 2025 developments are not yet reflected, recent actions, such as targeting independent voices and undermining judicial independence, raise serious concerns. Beyond the CPI findings, the temporary freeze and weakening of enforcement of the Foreign Corrupt Practices Act signal tolerance for corrupt business practices, while cuts to U.S. aid to overseas civil society have weakened global anti-corruption practices.”

Statistically, the U.S. scored 64, and tied with the Bahamas for 29th. For historical context, during the Obama administration from 2012 to 2016, the American score averaged 74 (with a peak of 76 in 2015), and U.S. rankings varied from 19th to 15th. For contemporary comparisons, the 2025 Index puts the U.S. 23rd among the 38 OECD countries, down from 16th in 2015; fourth in the Western Hemisphere, down from second and below Canada, Uruguay, and Barbados; and sixth in the G-7, down from fourth.

The Powell case and its cousins no doubt help to explain this. But to end on a hopeful note, their implications for corruption in American government are complex. The attempt to coerce the Federal Reserve Board through subpoenas is an obvious indicator of deteriorating governance. On the other hand, the Fed’s determination to continue making monetary policy based on careful evaluation of the economic evidence, and the Court’s ruling on the subpoenas, both represent important areas in which personal integrity and the rule of law remain the norm in American public life. They suggest that though TI’s analysts have reason for gloom, this battle isn’t yet lost.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Fed Chair Powell’s video comment on the Trump admin.’s subpoenas.

And the D.C. Circuit Court’s ruling.

Big picture:

Transparency International’s 2025 Corruption Perception Index, with links to the archived Indexes from 1995 through 2024.

… The methodology and indicators.

… The sources.

… And the Index’s very pessimistic look at the western hemisphere — “the Americas show no progress in the fight against corruption” — with especially strong words for the United States, and notes on deteriorating environments in El Salvador and Ecuador. TI does, though, commend the Dominican Republic and Guyana for an improving landscape.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.