America is losing its comparative advantage

The US government’s current policies weaken the comparative advantage in education, technology, military, film and agriculture. Patrick Drennan is reporting.

A comparative advantage existing When a country is able to produce goods with a lower opportunity cost compared to other countries.

America has economic comparative advantages in services:

Insurance and Finance;
beef, corn and soybeans;
Movies and popular music;
Weapons and space technology;
oil and natural gas; And
software.

The United States has these advantages due to its extremely diverse and industrialized land mass, advanced labor skills and creativity, higher education and financial reserve and support institutions.

It has no comparative advantage in large -scale, labor -intensive industries such as textile, shoes, mobile phones and computer production, generic drugs and tropical foods such as bananas, rice and cocoa. Unless the United States imports cheap labor, it does not change the land mass in tropical states such as Hawaii or uses a large amount of government (taxpayer) to finance these industries.

A few countries have the same natural resources, infrastructure, talented labor or technology to compete with America, but have their own advantages.

The policies of the current US administration endanger America’s comparative advantages, especially in education, technology, army, film and agriculture.

Education

USA squeezed the market to the corner higher educationIt constitutes about one third of the top 100 universities. . Center for Strategic and International Research Science and Engineering found that the “dating rate için for American temporary visa holders was about 71% after five years.

However, with the executive orders aimed at training, including US President Donald Trump, increasing visa rejection rates in the midst of the change of US migration policy increased vendetta Against Harvard University, it affects emotions.

Since Trump returned to the office, management canceled More than a thousand student visa, usually without explanation. International students are now looking for the best universities outside the USA.

Not only students – 75% of US scientists who respond Nature questionnaire He thought of leaving America for Canada or Europe.

Technology

American technology has always been managed by large, dominant companies. Companies such as IBM, Google, Intel, Microsoft, Apple, Meta and Amazon have created markets, set standards, supported leveraged scale economies and long -term, tax -exempt research and development. This advantage allows the US to produce high -valuable technology products at competitive costs and to increase global trade in advanced technologies.

The main reason for this comparative advantage is that the United States has a large and highly qualified labor force, especially in the fields of STEM (science, technology, engineering and mathematics). This allows the development and implementation of complex technologies.

The main difficulty of maintaining the technological advantage of America is to lose its talented labor force.

National Science Foundation (NSF) 2024 Indicators Report In the case of US Science and Engineering, foreign -born workers in 2021 generally made up about 19% of the US STEM labor force.

AI

Chinese production arrival in January 2025 Deepseek-R1 – Openai’s Chatgpt and Google’s twins – an opponent – shock America, the fastest graphic processing units (GPU) made by the California technology company, because it was developed cheaper and only 6 million dollars using old semiconductor chips. Nvidia.

Artificial intelligence applications are software programs that use AI techniques To fulfill certain tasks. They are increasingly valuable in health services, education, army, finance and manufacturing.

Foundations of chatbot training method known as “reinforcement learning” developed With NSF grants.

However, the Ministry of Government Productivity (Dan) Freezed, canceled or slowed down in another way billions Dollar and fired in grants hundreds of Personnel from federal institutions that have financed the country’s leading academic research, including the National Health Institutes and NSF.

Military

America in 2025 to spend 895 billion dollars in the army. This cost An average American taxpayer is about 5,000 dollars a year. As a result, America leads the world in sophisticated military technology and equipment.

The comparative advantage of the US army stems from advanced technology, solid logistics support, AI and a broad alliance network – the second is threatened by isolant policies.

Currently, no other nation can produce weapons like a patriotic air defense missile systems– M142 Himars Truck -mounted missiles, Atcam Long -range missiles and apparently indispensable Bradley fight vehicles. Russia, China and America NATO Allies They are competing to catch.

However, more American allies are turning to other weapons manufacturers to convince their armies. For example, Poland bought South Korean tanks; . Czech RepublicHungary and Colombia Swedish Jas 39 Grephen fighter aircraft; And Australia bought Spanish AIR TANKERSbillion dollars in agreements. Probably foreign alternatives are cheaper, flexible, modern and timely and delivered in the budget. Cost carries America’s new F-35 jet fighters are the best example.

Movies

Trump on May 5 announced 100% tariff in films produced outside the country by saying that the American film industry is dead “Very fast death”. Since then, there was no other interpretation or detail about how it would work.

Trump burned the fact that many Hollywood films were shot abroad. High profile examples called “illegal production” term It can be found in the UK to define the flight of film production from Hollywood. Bad And BarbieThe largest box office records of recent years were mainly withdrawn in studios in the southeast of England.

Accordingly Rough‘S 2025 questionnaire When the Studio executives were asked what they thought about the most important criteria when choosing a place of shooting, tax incentives were the main issue.

However, production tax incentives are not only in other countries but also 27 Americans states Apart from California, it offers tax incentives. Among the states with rich loans, Louisiana, New York and Georgia, House Marvel Film series.

Despite the Aöz, the financing and distribution of films remains in America.

Hollywood “Big Five“Production companies and the best movie distributor Netflix is predominantly American -centered and owned by online distributors such as Apple TV+and Disney.

Former Republican Congress Member in CNN Jim Renacci announced:

“There are much better tools [than tariffs]: Tax incentives for domestic production, investments in film infrastructure and public-private partnerships that make the US competitive. “

Agriculture

American Federal Government expenses More than $ 30 billion per year for farm businesses and agricultural subsidies.

. 2025 Farm Invoice It was an opportunity for the Congress to rethink the comprehensive subsidies given to agriculture. Subsidies can distort the economy, damage the environment, and mainly flow to the largest manufacturers. In 2021, the average income of all farm households was $ 135.281. 32 % All US households are higher than $ 102.316.

However, without subsidies, American farms and farms would fight to survive. Beyond that, overseas manufacturers grow.

In the last decade, the United States has provided the most beef to the rest of the world. Now, according to the US Ministry of Agriculture (USDA) The United States supplies 20%of Brazil and 13%of China with 20%of the beef meat in the world.

Interestingly, Brazilian company Jbs saThe world’s largest meat processing enterprise has cattle and poultry processing facilities in 14 American states and Porto Rico. allegations American subsidies and tax cuts.

New Zealand ended most of the farm subsidies in the 1980s, considering that the country was more dependent on farming than the United States. Farm Efficiency, Earnings and Environmental Applications developed After the reforms of New Zealand, farmers reduced costs, while diversified land use searched for non -agricultural income and developed new markets.

In order to put this on this perspective, the US exported agricultural products of $ 178.7 billion in 2023, while New Zealand’s agricultural export revenue was about $ 35 ($ 54 billion) by 30 June 2023. Avustralya çiftçileri, sadece en az sübvansiyonlu (AU), yeni Zelanda’nın en az sübvansiyonlu (AU) ikincisi, yeni Zelanda’ya kadar, yeni Zelanda’ya, büyük bir şekilde büyük bir şekilde, büyük bir sübvansiyon, büyük ölçüde büyük bir şekilde, yeni Zelanda’yı, büyük bir şekilde, büyük bir şekilde, büyük bir şekilde, büyük bir sübvansiyon, büyük ölçüde büyük bir şekilde, büyük ölçüde büyük bir In the figure, in a large way, largely, largely exposed to New Zealand, and in the 2022-23 financial year forestry products.

. CATO Institute Came to this solution:

When a government gives special privileges such as tariff protection or subsidies to certain producers at the borders of its country, most of the burden of these privileges fall to the citizens of that government. As a result, that country was not richer, but poorer. ‘

For now, the United States will provide a comparative advantage in the above industries. However, as long as the overseas competitors continue to benefit from technology such as advanced education, artificial intelligence and cheap labor forces to resist these advantages, this will wear.

https://www.youtube.com/watch?v=hqrefkwia-q

Patrick Drennan is a New Zealand journalist with an American history and economy degree.

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