Edward Conard

Top Ten New York Times Bestselling Author

  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
Upside of Inequality Oxford Unintended Consequences

AI Summary. U.S. manufacturing growth is attributed to demand rather than tariffs, with McKinsey analysis finding that sectors with strong domestic production also had strong imports rather than the lower imports that reshoring would imply. Computer and electronic products output rose 7.7% while imports in the sector rose 40.5%, and aerospace and transportation equipment output rose 28%.

Greg Ip Wall Street Journal
Date Posted:

US manufacturing output has increased 2.3% since January 2025. In the sectors where output rose, so did imports, suggesting the increase is due to changes in underlying demand, not tariffs.

Is demand rather than tariffs driving U.S. manufacturing growth?

Core argument: U.S. domestic production of computer and electronic products rose 7.7% in the fourth quarter from a year earlier while imports in the sector rose 40.5%, part of a pattern McKinsey found in several sectors where strong production coincided with strong imports.

This stealth recovery, though, isn’t because of tariffs. Instead, credit goes to the most basic economic force of all: demand. The U.S. is good at making things that happen to be in big demand right now. McKinsey looked at production, imports and investment, reasoning that reshoring would be associated with lower imports and more investment. While no uniform pattern emerged, they did find in several sectors that where domestic production was strong, so were imports. Where production was down, so were imports. For example, domestic production of computer and electronic products last year was up 7.7%. (All its figures are from the fourth quarter compared with a year earlier.) But imports in this sector were up even more, by 40.5%. Aerospace and transportation equipment (which excludes trucks and cars) also boomed last year, with domestic output up 28%. No mystery here. Boeing’s jetliner deliveries soared 72% last year to 600 as production, curtailed over safety scrutiny, recovered. A new global arms race is lifting orders for jet fighters, missiles and helicopters. Meanwhile, aerospace imports rose 3%.

Takeaways by Macro Roundup® AI

  1. U.S. domestic production of computer and electronic products rose 7.7% in the fourth quarter from a year earlier while imports in the sector rose 40.5%, part of a pattern McKinsey found in several sectors where strong production coincided with strong imports.
  2. Aerospace and transportation equipment output, excluding trucks and cars, rose 28% from a year earlier while aerospace imports rose 3%, as Boeing's jetliner deliveries climbed 72% to 600 after production curtailed by safety scrutiny recovered.
  3. The U.S. manufacturing recovery is credited to demand rather than tariffs, with a global arms race lifting orders for jet fighters, missiles and helicopters.

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