Global Trade Didn’t Make America Poor—It Made America Richer

As we debated the merits of the Trump tariffs, many argued that global trade and the US deficit—Americans buying from foreigners—have made the US poorer.

Many quoted our $35 trillion government debt as evidence of American poverty driven by foreigners, outsourcing, and trading.

We think people are very confused. American households, in aggregate, have a total wealth of ~ $170 trillion.

And, by the way, our 800+ billionaires account for ~$6 trillion, or 3.5% of our national wealth—not 90%, as some would have you believe.

For comparison:

• Japan, with about 40% of our population, has total wealth of $27 trillion (16% of US wealth).
• South Korea, with one-seventh of our population, has just under $1 trillion in total wealth (0.6%).
• China, with 1.4 billion people—roughly four times the US population—has national wealth of $84 trillion, or 50% of the United States.

In aggregate, the United States is the wealthiest country by a wide margin.

And on per person basis, one of the wealthiest still.

So please, do not think the United States has spent itself into poverty. Nor believe the rise in the wealth of the export-oriented Asian economies occurred at the detriment of US prosperity.

Global trading is not some weird zero-sum competition. Yes, there are losers and winners. But in aggregate, America is winning—and has won big.

We believe the fact that we have poor, struggling people in the world’s richest country is a social problem, not a global trading problem.

Important Information

Issued by Rayliant Investment Research d/b/a Rayliant Asset Management (“Rayliant”). Unless stated otherwise, all names, trademarks and logos used in this material are the intellectual property of Rayliant.

This document is for information purposes only. It is not a recommendation to buy or sell any financial instrument and should not be construed as an investment advice. Any securities, sectors or countries mentioned herein are for illustration purposes only. Investments involves risk. The value of your investments may fall as well as rise and you may not get back your initial investment. Performance data quoted represents past performance and is not indicative of future results. While reasonable care has been taken to ensure the accuracy of the information, Rayliant does not give any warranty or representation, expressed or implied, and expressly disclaims liability for any errors and omissions. Information and opinions may be subject to change without notice. Rayliant accepts no liability for any loss, indirect or consequential damages, arising from the use of or reliance on this document.

Hypothetical, back-tested performance results have many inherent limitations. Unlike the results shown in an actual performance record, hypothetical results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under- or over- compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical results in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any investment manager.