September 1, 2025 • 13 mins
America has lived with a chronic trade deficit since 1974 — and the cost has been staggering. Kerry Lutz and Spencer Morrison unpack how over 60,000 factories have closed and more than 5 million manufacturing jobs have vanished, while nearly $10 trillion has been drained from the U.S. economy through China’s subsidies, intellectual property theft, and unfair trade practices. They reveal how free trade’s short-term benefits have hollowed out the American industrial base, funneled wealth into Wall Street, and left workers behind. The conversation dives into tariffs, reshoring, the paradox of free trade, and whether AI can help rebuild America’s economic strength — or if the damage is already too deep. Find Spencer here: https://substack.com/@realspmorrison Find Kerry here: http://financialsurvivalnetwork.com/ and here: https://inflation.cafe Kerry's New Book “The World According to Martin Armstrong – Conversations with the Master Forecaster” is now a #1 Best Seller on Amazon. . Get your copy here: https://amzn.to/4kuC5p5
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The theft of American technology and they're still doing that.
By the way, these guys have stolen, like I think
since in the last twenty years almost ten trillion dollars
worth of American IP. It's unbelievable, unbelievable. You don't have
property rights in China if you're an American company, right, Yeah,
so this is a problem. So what they've done essentially
is they've cheated, they've stolen, and they've set up a
(00:23):
system where the playing field is not at all level
when an American company is competing with a Chinese company.
Speaker 2 (00:29):
You're listening to Carrie Letz's Financial Survival Network where you
get valuable information you just can't find anywhere else to
thrive in today's trying times. You need the Financial Survival
Network now more than ever. Go to Financial Survivalnetwork dot
com and get your free newsletter and gift. Financial Survival
(00:50):
Network now more than.
Speaker 3 (00:53):
Ever, And welcome you are listening to and watching the
Financial Survival Network. I'm your host, Carrie Lutz. Well, tariffs
have been all the rage. It looks like the markets
have calmed down enough, they've accepted the inevitability of the
(01:13):
Trump tariff regime. Is it a plus is it a minus?
I want to know your thoughts. Do you think tariffs
are going to help make America great again? Or is
it going to bring turmoil to the world. But one
person who does believe that they are beneficial. Spencer Morrison,
(01:33):
author of Reshore, tariffs will bring our jobs home and
revive the American dream. Spencer, it's great to have you on.
You know, growing up, I was really into Milton Friedman,
free trade, all of this, but free trade never really
took into account weaponized free trade, and that's kind of
(01:54):
what we've been having over the past fifty years, isn't it.
Speaker 1 (01:58):
Yeah, that's absolutely correct. You know, thanks for having me
on the program. I love coming on and having an
in depth discussion about these issues. You're entirely right. So
for the last fifty years, especially ever since nineteen seventy four,
America has been running a large on a trade deficit.
You know, the cumulative value of that trade deficit, when
we adjust it for inflation, it's over twenty eight trillion dollars.
(02:21):
That's like a whole year of our GDP that we
used to buy products from foreign countries, over and above
what we built in this country, and that's caused a
lot of economic dislocation. So you look, for example, since
two thousand and one, when China joined the World Trade Organization,
over sixty thousand factories closed. They moved to China because
we don't need them anywhere by buying the Chinese products,
(02:43):
over five million manufacturing jobs. They left our shores, they
went to China, they went to Mexico. And on top
of that, the balance of payments, right, so we still
have to pay for these products. We're not getting them
for free, but we're not making anything to trade for them.
So in order to pay for them, what we have
to do is we have to sell off assets, so
(03:03):
the value of things that we made in the past,
things like the value of our stock market houses, or
we have to sell debt so the promise to make
product in the future. As a result, what's happened is
we've done the old switch ru. We've taken a whole
lot of money from the productive economy, from Main Street,
and we sort of funneled it into Wall Street and
the financial sectors. So it's been a really bad, really
(03:27):
bad deal for the ordinary America who you know works
for a living.
Speaker 3 (03:32):
Yeah, it's you know who thought this was a good idea.
You know, It's funny thing. I was talking to a
group of guys I'm friends with. We have coffee together
at Starbucks regularly, and I live in Palm Beach. County
is the most dysfunctional county in Florida by far, because
it's the size. It's bigger than Rhode Island, it's bigger
(03:55):
than Delaware, and parts of the county are agricultural which
bear no connection to the coastal communities. So I'm saying,
just redraw the lines. And the resistance I get from
guys who understand inefficiency and understand how screwed up government is,
it's like, why would you want to do that? Like
everything should just stay the way it is. But you know,
(04:17):
before it's the way it is now, it wasn't that way.
Right in the fifties, sixties, seventies, the US was a
manufacturing powerhouse, the manufacturing powerhouse of the world. And it's
not because our quality got so bad other countries. Yeah,
certain industries, autos, et cetera. Quality definitely was a factor
(04:41):
in their decline, but it was really just unfair trade
practices that caused this situation, right.
Speaker 1 (04:50):
Yeah, I mean, so we have to understand the dynamics
that have led to this offshoring disaster, and ultimately it
doesn't act really boiled down to your standard sort of
economic models. What we have here is a confluence of
both economics and politics.
Speaker 3 (05:08):
Right.
Speaker 1 (05:09):
People need to understand that the economy is just not
this thing that sort of operates above us and operates
according to its own laws. There are foreign governments and
in fact our government that take large stakes in the
economy and would like to manipulate it for their own purposes.
And China has been doing that expertly.
Speaker 3 (05:28):
Right.
Speaker 1 (05:28):
So, one of the things that China did in the
nineteen eighties and leading into the early two thousands is
they subsidized the heck out of their manufacturing sector. They
gave preferential and use policies. They looked the other way
in terms of you know, IP theft, the theft of
American technology. And they're still doing that. By the way,
(05:49):
these guys have stolen, like I think since in the
last twenty years almost ten trillion dollars worth of American IP.
It's unbelievable, unbelievable. You don't have property rights in China
if you're an American com company, right, Yeah, so this
is a problem. So what they've done, essentially is they've cheated,
they've stolen, and they've set up a system where the
(06:10):
playing field is not at all level. When an American
company is competing with a Chinese company, it's not level.
They're backed by their government. They're allowed to steal technology.
Of course, our guys can't do that, and the result
is that we're getting out competed, not because their products
are necessarily more expensive, and not because their products that
are of worse quality. We're getting out competed because the
Chinese government is plugging a lot of money into their
(06:32):
businesses for the purposes of out computing our industry. And then,
you know what the thing is. This is what Peter
Navarro has rightly pointed out. Once the Chinese out computer
industries and they kill them, they move in and then
they jack up the prices. So what they're doing is
they're playing a long game. They're dumping their products and
then establishing monopolies because they know that, you know, free
(06:53):
trade is not just about what's good today. They're looking
at it from a business and an investment standpoint. They
want to kill our businesses so they can take the
market chair, not today, ten years from now, and that's
the real difference.
Speaker 3 (07:07):
And you know what, Like I was listening to a
guy who's an inventor and big on Amazon, and he says,
they look for markets when they see you're doing five
million or more. And it's easy to figure out because
the algorithms are available on Amazon. They then start to
(07:28):
compete with you. They copy r design. Whether you have
a trademark, copyright, or patent, doesn't matter. You complain to Amazon,
they do absolutely nothing. Then they overwhelm the sector. They'll
have ten of them there, all selling the same thing,
different prices, different everything. And this is how they destroy
(07:49):
American businesses here.
Speaker 1 (07:51):
Yeah, we're the ones that invent and innovate. They copy,
but they do it cheaper because they have the state
lowering their prices artificially. Flave labor and slave labor. I mean,
we don't talk about that. Nobody wants to talk about it.
It's the same thing that's happening in India too. You know,
the price of labor in India is one twenty fourth
what it is in the States. And how do you
compete with that on price?
Speaker 3 (08:12):
You can't, Yeah, totally cannot so so the solution is
what Trump is doing. And I have a theory that
I believe that China has already capitulated. The only reason
why Trump hasn't gone in heavier is because the Chinese
illusion of an economy has already collapsed, and that would
(08:33):
be the final nail in their coffin. But things like fentanyl,
they've definitely cracked down on a lot of it. I
think the intellectual property is starting to become an issue here.
What are your thoughts.
Speaker 1 (08:47):
I think people are finally talking about the IP. I mean,
this has been going on for decades and no one
even talks about it. It's pretty unbelievable. But you know
what I'll say about China is I will believe it
when I see it. China has been saying the verify yeah, exactly.
And I think it's important to remember that China when
they joined the World Trade Organization, they already signed up
(09:09):
for all of this because that was a component of
them joining, and then you know, obviously they didn't actually
follow through on any of it. It's been over twenty years,
so you know, they're saying a lot of the right things,
but you know, the proof is in the pudding. Are
they going to actually follow through.
Speaker 3 (09:24):
I'm not so sure.
Speaker 1 (09:26):
You mentioned at the start of the program Milton Friedman,
and I think and I just wanted to come back
to that because we were just talking about the difference
between you know, a good trade today and a good
trade tomorrow. You know, Milton Friedman has you know, been
absolutely instrumental his ideas and maybe maybe more so his
(09:47):
publicity in a lot of ways, I mean, communicating about
economics to ordinary people, and I think most of that
has been for the best. The one thing that I
would like to just say in terms of you know,
this free trade sort of paradox where America is free
trading and yet we seem to be getting the short
end of the stick. The reason for that is because
economics as a discipline looks at whether or not a
(10:09):
trade is efficient today. It's a very different modality and
a way of looking at things. It's very different than
the point of view of an investor or right who's
looking at you know, this trade may be inefficient today,
but it could be a good investment ten years from now.
And in his book Free to Choose, Milton Friedman gave
this example of you know, the sort of maximizing comparative
(10:33):
advantage through the secretary and the lawyer. And he said, obviously,
the secretary is good at typing, the lawyer is good
at doing legal work. It makes sense for the firm
that the lawyer specializes. Yeah, he's got to specialize in
doing the legal work rather than doing his own typing.
And the paralegal is going to be doing the typing,
and that'll make everybody richer. And of course that's true.
(10:55):
But when you look at it from an investment perspective,
it's better for the paralegal to go to law school
and become a lawyer, because even if she's a bottom
feeder lawyer, she's going to make more money than the
best paid parently all in our world. Right, So that's
the difference. Right, So, where it makes good sense to
(11:15):
trade and make that trade now, but ten years from now,
it actually doesn't make. The analogy falls apart. And the
same thing is true with our general economy. It may
make sense to buy cheap goods from China now, but
ten years from now, when we've hollowed out our industrial base,
we've lost the capacity to make things. That stifles our
innovation and our ability to grow the economy in the
(11:36):
long run exactly.
Speaker 3 (11:38):
So what feels good now isn't going to feel so
good in ten years when the results of it happen.
All right, well, exactly so, everybody out there get the
book like I did. It's called Reshure, How Tariffs will
bring our jobs home, Revive the American Dream. I think
it's already happening now, Spencer. It's happening so much faster
(12:01):
because AI makes things happen way faster than anybody ever
believed possible. And I've been writing books to AI doesn't
write it for me, but it's sure as heck does
clean up my lousy work from my first draft and
enables me to edit at a rate that I never
believed possible before. And everybody get the book. Highly recommended.
(12:25):
I think it'll give you an insight, but I want
to know your feelings out there. Is resharing the key?
Is it possible to save the American Dream? Or is
the American Dream really dead? And how are you contributing?
How's the American Dream working for you? Spencer? Really appreciated. Hey,
it's got a question? Comment Klatcarrie LUTs dot com and
(12:49):
of course you will find a link to Spencer's book
and site on Financial Survival Network dot com. Just ask
that you please sign up for our free newsletter, like
over seventy thousand of you out there have done. Spencer.
It's great connecting with you. We'll talk to you again soon. Hey,
it's my pleasure.
Speaker 1 (13:07):
Thanks for having me on the show.
Speaker 2 (13:08):
Thanks for listening to carry Letz's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network now more than ever,
The theft of American technology and they're still doing that.
By the way, these guys have stolen, like I think
since in the last twenty years almost ten trillion dollars
worth of American IP. It's unbelievable, unbelievable. You don't have
property rights in China if you're an American company, right, Yeah,
so this is a problem. So what they've done essentially
is they've cheated, they've stolen, and they've set up a
(00:23):
system where the playing field is not at all level
when an American company is competing with a Chinese company.
Speaker 2 (00:29):
You're listening to Carrie Letz's Financial Survival Network where you
get valuable information you just can't find anywhere else to
thrive in today's trying times. You need the Financial Survival
Network now more than ever. Go to Financial Survivalnetwork dot
com and get your free newsletter and gift. Financial Survival
(00:50):
Network now more than.
Speaker 3 (00:53):
Ever, And welcome you are listening to and watching the
Financial Survival Network. I'm your host, Carrie Lutz. Well, tariffs
have been all the rage. It looks like the markets
have calmed down enough, they've accepted the inevitability of the
(01:13):
Trump tariff regime. Is it a plus is it a minus?
I want to know your thoughts. Do you think tariffs
are going to help make America great again? Or is
it going to bring turmoil to the world. But one
person who does believe that they are beneficial. Spencer Morrison,
(01:33):
author of Reshore, tariffs will bring our jobs home and
revive the American dream. Spencer, it's great to have you on.
You know, growing up, I was really into Milton Friedman,
free trade, all of this, but free trade never really
took into account weaponized free trade, and that's kind of
(01:54):
what we've been having over the past fifty years, isn't it.
Speaker 1 (01:58):
Yeah, that's absolutely correct. You know, thanks for having me
on the program. I love coming on and having an
in depth discussion about these issues. You're entirely right. So
for the last fifty years, especially ever since nineteen seventy four,
America has been running a large on a trade deficit.
You know, the cumulative value of that trade deficit, when
we adjust it for inflation, it's over twenty eight trillion dollars.
(02:21):
That's like a whole year of our GDP that we
used to buy products from foreign countries, over and above
what we built in this country, and that's caused a
lot of economic dislocation. So you look, for example, since
two thousand and one, when China joined the World Trade Organization,
over sixty thousand factories closed. They moved to China because
we don't need them anywhere by buying the Chinese products,
(02:43):
over five million manufacturing jobs. They left our shores, they
went to China, they went to Mexico. And on top
of that, the balance of payments, right, so we still
have to pay for these products. We're not getting them
for free, but we're not making anything to trade for them.
So in order to pay for them, what we have
to do is we have to sell off assets, so
(03:03):
the value of things that we made in the past,
things like the value of our stock market houses, or
we have to sell debt so the promise to make
product in the future. As a result, what's happened is
we've done the old switch ru. We've taken a whole
lot of money from the productive economy, from Main Street,
and we sort of funneled it into Wall Street and
the financial sectors. So it's been a really bad, really
(03:27):
bad deal for the ordinary America who you know works
for a living.
Speaker 3 (03:32):
Yeah, it's you know who thought this was a good idea.
You know, It's funny thing. I was talking to a
group of guys I'm friends with. We have coffee together
at Starbucks regularly, and I live in Palm Beach. County
is the most dysfunctional county in Florida by far, because
it's the size. It's bigger than Rhode Island, it's bigger
(03:55):
than Delaware, and parts of the county are agricultural which
bear no connection to the coastal communities. So I'm saying,
just redraw the lines. And the resistance I get from
guys who understand inefficiency and understand how screwed up government is,
it's like, why would you want to do that? Like
everything should just stay the way it is. But you know,
(04:17):
before it's the way it is now, it wasn't that way.
Right in the fifties, sixties, seventies, the US was a
manufacturing powerhouse, the manufacturing powerhouse of the world. And it's
not because our quality got so bad other countries. Yeah,
certain industries, autos, et cetera. Quality definitely was a factor
(04:41):
in their decline, but it was really just unfair trade
practices that caused this situation, right.
Speaker 1 (04:50):
Yeah, I mean, so we have to understand the dynamics
that have led to this offshoring disaster, and ultimately it
doesn't act really boiled down to your standard sort of
economic models. What we have here is a confluence of
both economics and politics.
Speaker 3 (05:08):
Right.
Speaker 1 (05:09):
People need to understand that the economy is just not
this thing that sort of operates above us and operates
according to its own laws. There are foreign governments and
in fact our government that take large stakes in the
economy and would like to manipulate it for their own purposes.
And China has been doing that expertly.
Speaker 3 (05:28):
Right.
Speaker 1 (05:28):
So, one of the things that China did in the
nineteen eighties and leading into the early two thousands is
they subsidized the heck out of their manufacturing sector. They
gave preferential and use policies. They looked the other way
in terms of you know, IP theft, the theft of
American technology. And they're still doing that. By the way,
(05:49):
these guys have stolen, like I think since in the
last twenty years almost ten trillion dollars worth of American IP.
It's unbelievable, unbelievable. You don't have property rights in China
if you're an American com company, right, Yeah, so this
is a problem. So what they've done, essentially is they've cheated,
they've stolen, and they've set up a system where the
(06:10):
playing field is not at all level. When an American
company is competing with a Chinese company, it's not level.
They're backed by their government. They're allowed to steal technology.
Of course, our guys can't do that, and the result
is that we're getting out competed, not because their products
are necessarily more expensive, and not because their products that
are of worse quality. We're getting out competed because the
Chinese government is plugging a lot of money into their
(06:32):
businesses for the purposes of out computing our industry. And then,
you know what the thing is. This is what Peter
Navarro has rightly pointed out. Once the Chinese out computer
industries and they kill them, they move in and then
they jack up the prices. So what they're doing is
they're playing a long game. They're dumping their products and
then establishing monopolies because they know that, you know, free
(06:53):
trade is not just about what's good today. They're looking
at it from a business and an investment standpoint. They
want to kill our businesses so they can take the
market chair, not today, ten years from now, and that's
the real difference.
Speaker 3 (07:07):
And you know what, Like I was listening to a
guy who's an inventor and big on Amazon, and he says,
they look for markets when they see you're doing five
million or more. And it's easy to figure out because
the algorithms are available on Amazon. They then start to
(07:28):
compete with you. They copy r design. Whether you have
a trademark, copyright, or patent, doesn't matter. You complain to Amazon,
they do absolutely nothing. Then they overwhelm the sector. They'll
have ten of them there, all selling the same thing,
different prices, different everything. And this is how they destroy
(07:49):
American businesses here.
Speaker 1 (07:51):
Yeah, we're the ones that invent and innovate. They copy,
but they do it cheaper because they have the state
lowering their prices artificially. Flave labor and slave labor. I mean,
we don't talk about that. Nobody wants to talk about it.
It's the same thing that's happening in India too. You know,
the price of labor in India is one twenty fourth
what it is in the States. And how do you
compete with that on price?
Speaker 3 (08:12):
You can't, Yeah, totally cannot so so the solution is
what Trump is doing. And I have a theory that
I believe that China has already capitulated. The only reason
why Trump hasn't gone in heavier is because the Chinese
illusion of an economy has already collapsed, and that would
(08:33):
be the final nail in their coffin. But things like fentanyl,
they've definitely cracked down on a lot of it. I
think the intellectual property is starting to become an issue here.
What are your thoughts.
Speaker 1 (08:47):
I think people are finally talking about the IP. I mean,
this has been going on for decades and no one
even talks about it. It's pretty unbelievable. But you know
what I'll say about China is I will believe it
when I see it. China has been saying the verify yeah, exactly.
And I think it's important to remember that China when
they joined the World Trade Organization, they already signed up
(09:09):
for all of this because that was a component of
them joining, and then you know, obviously they didn't actually
follow through on any of it. It's been over twenty years,
so you know, they're saying a lot of the right things,
but you know, the proof is in the pudding. Are
they going to actually follow through.
Speaker 3 (09:24):
I'm not so sure.
Speaker 1 (09:26):
You mentioned at the start of the program Milton Friedman,
and I think and I just wanted to come back
to that because we were just talking about the difference
between you know, a good trade today and a good
trade tomorrow. You know, Milton Friedman has you know, been
absolutely instrumental his ideas and maybe maybe more so his
(09:47):
publicity in a lot of ways, I mean, communicating about
economics to ordinary people, and I think most of that
has been for the best. The one thing that I
would like to just say in terms of you know,
this free trade sort of paradox where America is free
trading and yet we seem to be getting the short
end of the stick. The reason for that is because
economics as a discipline looks at whether or not a
(10:09):
trade is efficient today. It's a very different modality and
a way of looking at things. It's very different than
the point of view of an investor or right who's
looking at you know, this trade may be inefficient today,
but it could be a good investment ten years from now.
And in his book Free to Choose, Milton Friedman gave
this example of you know, the sort of maximizing comparative
(10:33):
advantage through the secretary and the lawyer. And he said, obviously,
the secretary is good at typing, the lawyer is good
at doing legal work. It makes sense for the firm
that the lawyer specializes. Yeah, he's got to specialize in
doing the legal work rather than doing his own typing.
And the paralegal is going to be doing the typing,
and that'll make everybody richer. And of course that's true.
(10:55):
But when you look at it from an investment perspective,
it's better for the paralegal to go to law school
and become a lawyer, because even if she's a bottom
feeder lawyer, she's going to make more money than the
best paid parently all in our world. Right, So that's
the difference. Right, So, where it makes good sense to
(11:15):
trade and make that trade now, but ten years from now,
it actually doesn't make. The analogy falls apart. And the
same thing is true with our general economy. It may
make sense to buy cheap goods from China now, but
ten years from now, when we've hollowed out our industrial base,
we've lost the capacity to make things. That stifles our
innovation and our ability to grow the economy in the
(11:36):
long run exactly.
Speaker 3 (11:38):
So what feels good now isn't going to feel so
good in ten years when the results of it happen.
All right, well, exactly so, everybody out there get the
book like I did. It's called Reshure, How Tariffs will
bring our jobs home, Revive the American Dream. I think
it's already happening now, Spencer. It's happening so much faster
(12:01):
because AI makes things happen way faster than anybody ever
believed possible. And I've been writing books to AI doesn't
write it for me, but it's sure as heck does
clean up my lousy work from my first draft and
enables me to edit at a rate that I never
believed possible before. And everybody get the book. Highly recommended.
(12:25):
I think it'll give you an insight, but I want
to know your feelings out there. Is resharing the key?
Is it possible to save the American Dream? Or is
the American Dream really dead? And how are you contributing?
How's the American Dream working for you? Spencer? Really appreciated. Hey,
it's got a question? Comment Klatcarrie LUTs dot com and
(12:49):
of course you will find a link to Spencer's book
and site on Financial Survival Network dot com. Just ask
that you please sign up for our free newsletter, like
over seventy thousand of you out there have done. Spencer.
It's great connecting with you. We'll talk to you again soon. Hey,
it's my pleasure.
Speaker 1 (13:07):
Thanks for having me on the show.
Speaker 2 (13:08):
Thanks for listening to carry Letz's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network now more than ever,
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