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Yahoo
4 hours ago
- Business
- Yahoo
Here's How Much Taxes the Top 1% Pay in Florida
It's hard not to feel a little envious when you hear about the 'top 1%' in America. After all, the phrase often induces images of wealth, glamor and luxury — often beyond the average person's wildest dreams. But even the wealthiest Americans have to pay income tax. It just might not be as high as you'd expect, given how much your own income is likely taxed. Explore More: Read Next: GOBankingRates analyzed individual tax returns filed by Florida residents to find out how much the top 1% pays in taxes. Other sources used to figure this out include the U.S. Census American Community Survey, Missouri Economic Research and Information Center, Bureau of Labor Statistics Consumer Expenditure Survey and the Federal Reserve Economic Data. Here's how much the top 1% pay in taxes in Florida. Florida ranks second-highest in terms of total income tax share for the top 1%. These top earners pay 53.6% of the total income tax. The only state that ranks higher is Wyoming, which has a total income tax share for the top 1% of 54.7%. Florida's total income tax is more than $50 billion: Only four states have a total income tax share greater than $50 billion. These states are New York ($79 billion), Texas ($81 billion), Florida ($96 billion) and California ($122 billion). Average tax rate percentage for the top 1%: 25.98% Adjusted gross income for the top 1%: $370,582,169,000 Adjusted gross income share for the top 1%: 32.65% Total income tax share for the top 1%: 53.62% Total income tax paid for the top 1%: $96,264,565,000 Total number of tax returns received for the top 1%: 105,101 Rank in total income tax share paid for the top 1%: 2nd Consider This: According to the IRS, these are the marginal federal income tax brackets for single taxpayers and married individuals filing separately (2025): 37% for incomes over $626,350 35% for incomes over $250,525 32% for incomes over $197,300 24% for incomes over $103,350 22% for incomes over $48,475 12% for incomes over $11,925 10% for incomes $11,925 or less Marginal rates double for married couples filing jointly. Notably, Florida does not have a state income tax for individuals. The corporate income tax rate is 5.5%. Methodology: For this study, GOBankingRates analyzed individual tax returns by state to find out how much the top percents pay in taxes. For each state a number of factors were found including: total population, population ages 65 and over, total households, and household median income all sourced from the U.S. Census American Community Survey. The cost of living indexes were sourced from Missouri Economic and Research Information Center. Using the cost of living indexes and the national average expenditure costs, as sourced from the Bureau of Labor Statistics Consumer Expenditure Survey, the average expenditure cost for each location can be calculated. The average single family home value was sourced from Zillow Home Value Index for January 2025. Using the average single family home value, assuming a 10% downpayment, and using the most recent national average 30-year fixed mortgage rate, as sourced from the Federal Reserve Economic Data, the average mortgage can be calculated. Using the average mortgage and average expenditure costs, the average total monthly and annual cost of living can be calculated. Using data from the IRS SOI tax stats, the individual tax rates by income percentiles and by state were included. The states were sorted to show the highest to lowest tax share percentage. All data was collected on and is up to date as of Mar. 6, 2025. More From GOBankingRates 4 Affordable Car Brands You Won't Regret Buying in 2025 How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on Here's How Much Taxes the Top 1% Pay in Florida Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 hours ago
- Business
- Yahoo
Here's How Much Taxes the Top 1% Pay in Florida
It's hard not to feel a little envious when you hear about the 'top 1%' in America. After all, the phrase often induces images of wealth, glamor and luxury — often beyond the average person's wildest dreams. But even the wealthiest Americans have to pay income tax. It just might not be as high as you'd expect, given how much your own income is likely taxed. Explore More: Read Next: GOBankingRates analyzed individual tax returns filed by Florida residents to find out how much the top 1% pays in taxes. Other sources used to figure this out include the U.S. Census American Community Survey, Missouri Economic Research and Information Center, Bureau of Labor Statistics Consumer Expenditure Survey and the Federal Reserve Economic Data. Here's how much the top 1% pay in taxes in Florida. Florida ranks second-highest in terms of total income tax share for the top 1%. These top earners pay 53.6% of the total income tax. The only state that ranks higher is Wyoming, which has a total income tax share for the top 1% of 54.7%. Florida's total income tax is more than $50 billion: Only four states have a total income tax share greater than $50 billion. These states are New York ($79 billion), Texas ($81 billion), Florida ($96 billion) and California ($122 billion). Average tax rate percentage for the top 1%: 25.98% Adjusted gross income for the top 1%: $370,582,169,000 Adjusted gross income share for the top 1%: 32.65% Total income tax share for the top 1%: 53.62% Total income tax paid for the top 1%: $96,264,565,000 Total number of tax returns received for the top 1%: 105,101 Rank in total income tax share paid for the top 1%: 2nd Consider This: According to the IRS, these are the marginal federal income tax brackets for single taxpayers and married individuals filing separately (2025): 37% for incomes over $626,350 35% for incomes over $250,525 32% for incomes over $197,300 24% for incomes over $103,350 22% for incomes over $48,475 12% for incomes over $11,925 10% for incomes $11,925 or less Marginal rates double for married couples filing jointly. Notably, Florida does not have a state income tax for individuals. The corporate income tax rate is 5.5%. Methodology: For this study, GOBankingRates analyzed individual tax returns by state to find out how much the top percents pay in taxes. For each state a number of factors were found including: total population, population ages 65 and over, total households, and household median income all sourced from the U.S. Census American Community Survey. The cost of living indexes were sourced from Missouri Economic and Research Information Center. Using the cost of living indexes and the national average expenditure costs, as sourced from the Bureau of Labor Statistics Consumer Expenditure Survey, the average expenditure cost for each location can be calculated. The average single family home value was sourced from Zillow Home Value Index for January 2025. Using the average single family home value, assuming a 10% downpayment, and using the most recent national average 30-year fixed mortgage rate, as sourced from the Federal Reserve Economic Data, the average mortgage can be calculated. Using the average mortgage and average expenditure costs, the average total monthly and annual cost of living can be calculated. Using data from the IRS SOI tax stats, the individual tax rates by income percentiles and by state were included. The states were sorted to show the highest to lowest tax share percentage. All data was collected on and is up to date as of Mar. 6, 2025. More From GOBankingRates 25 Places To Buy a Home If You Want It To Gain Value 7 Things You'll Be Happy You Downsized in Retirement This article originally appeared on Here's How Much Taxes the Top 1% Pay in Florida Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
10 Cities Where Renting Is Now More Expensive Than Owning a Home
Buying a home isn't always the best financial move to make. It's something you should do only if you can very comfortably afford it. Unless we're living debt-free and have a good amount of money reserved for a down payment on a home, we need to ditch the idea that renting is irresponsible, as it may actually be the most responsible thing to do. Find Out: Read Next: But we must be extremely careful and look closely at the rent averages in the area we live in. We could be spending far more to rent than we would to own, in which case, owning would likely make a lot more financial sense. In a new study, GOBankingRates analyzed the average cost of rent and mortgages to find the cities where rent is now more expensive. These are the 10 where rent costs the most. Average value of single-family home: $139,640 Average monthly mortgage cost: $731 Average monthly rent: $1,661 How much more rent costs than mortgage, annually: $11,167 Explore More: Average value of single-family home: $109,766 Average monthly mortgage cost: $574 Average monthly rent: $1,519 How much more rent costs than mortgage, annually: $11,341 Average value of single-family home: $74,631 Average monthly mortgage cost: $390 Average monthly rent: $1,348 How much more rent costs than mortgage, annually: $11,497 Average value of single-family home: $210,248 Average monthly mortgage cost: $1,100 Average monthly rent: $2,079 How much more rent costs than mortgage, annually: $11,751 Average value of single-family home: $141,491 Average monthly mortgage cost: $740 Average monthly rent: $1,724 How much more rent costs than mortgage, annually: $11,807 Average value of single-family home: $203,708 Average monthly mortgage cost: $1,066 Average monthly rent: $2,150 How much more rent costs than mortgage, annually: $13,012 Average value of single-family home: $139,577 Average monthly mortgage cost: $730 Average monthly rent: $2,517 How much more rent costs than mortgage, annually: $21,438 Average value of single-family home: $220,533 Average monthly mortgage cost: $1,154 Average monthly rent: $3,242 How much more rent costs than mortgage, annually: $25,056 Average value of single-family home: $686,474 Average monthly mortgage cost: $3,591 Average monthly rent: $7,769 How much more rent costs than mortgage, annually: $50,134 Average value of single-family home: $1,166,315 Average monthly mortgage cost: $6,101 Average monthly rent: $19,650 How much more rent costs than mortgage, annually: $162,582 Methodology: For this study, GOBankingRates analyzed the average cost of rent and mortgages to find places where rent is more expensive. Using Zillow Research Data's Zillow Home Value Index and Zillow Observed Rental Index the average single-family home value and average rental cost per month can be sourced. By assuming a 20% down payment and using the national average 30-year fixed mortgage rate, as sourced from the Federal Reserve Economic Data, the average mortgage cost can be calculated. The difference in rent and mortgage was calculated and the top 100 places with a cheaper rent than mortgage were kept for this study. The livability index was sourced from AreaVibes and included as supplemental information. The total population, population ages 65 and over, total households, and household median income were all sourced from the US Census American Community Survey and included as supplemental information. To be qualified for this study, all places had to have all data sources available. All data was collected on and is up to date as of April 21, 2025. More From GOBankingRates 7 Tax Loopholes the Rich Use To Pay Less and Build More Wealth This article originally appeared on 10 Cities Where Renting Is Now More Expensive Than Owning a Home Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
3 days ago
- Business
- Miami Herald
Homebuyer survey: How Americans are budgeting, saving, and getting to the close
Homebuyer survey: How Americans are budgeting, saving, and getting to the close The process of buying a home is thrilling … and complicated. And in today's housing market, where home prices ascended steeply after mid-2020, would-be homeowners can sometimes feel like housing costs and interest rates are conspiring against them achieving their dream. After hitting a historic high at the end of 2022, the median price of a home sold at the end of 2024 was $419,200, according to Federal Reserve Economic Data (FRED) compiled by the Federal Reserve Bank of St. Louis. So how are homebuyers coping with the quest? To find out, SoFi surveyed 500 U.S. adults looking to buy a home.* Roughly half of respondents (55%) were in the market for their first home, while the rest (45%) were repeat purchasers. What SoFi learned: Finding a home that's affordable and financing the purchase are the biggest concerns, with more than 2 in 5 buyers saying their top challenge is home prices, and over a third saying that understanding different mortgage options is a chief concern. Read on for the lowdown on what buyers are wondering about-and what they are doing to master the home-buying process. Note: SoFi rounded percentages to the nearest whole number, so some data sets may not add up exactly to 100%. *The survey was completed in April 2024 and was conducted using a general U.S. population data set of 500 adults 18 and older. Key Findings Finding an affordable home and understanding mortgage options are the top challenges for are saving by cutting expenses, increasing savings, and finding additional income is widely used, with 65% using online listing platforms and 41% using online advice is sought, with 36% consulting financial advisors and 42% seeking real estate attorney challenges, 81% of homebuyers are optimistic about buying within budget in six months. Top home-buying challenges The number of active home listings in the U.S. took a dive during the COVID-19 pandemic, as homeowners hunkered down, complicating the buying-a-home process further. And although the market has recovered somewhat, available listings, which numbered around 829,000 at the start of 2025 according to FRED, are still well off the more than 1,033,000 active listings recorded in December 2019. This is just one of the factors that has contributed to upward pressure on home prices in many markets. Not surprising, then, that 42% of home-seekers say finding a home in their price range is their greatest challenge, according to SoFi's survey. And even if they find a place to buy, 14% of shoppers are struggling with inadequate savings for a down payment. If you're worried you need 20% for a down payment, you might be pleasantly surprised to learn that in late 2024, the median down payment was 15%, according to data from the National Association of Realtors (NAR), and the typical down payment for first-time buyers was 8%. In SoFi's buying-a-home survey, among those who were challenged to come up with a down payment, 49% hadn't explored down payment assistance programs-meaning they could be leaving money on the table. More than 1 in 10 respondents (11%) said an insufficient credit score was their greatest home-buying challenge. The same proportion said difficulty securing a mortgage is their main concern-and, of course, the two issues are interrelated. Mortgage lenders use credit scores to help determine eligibility and home loan interest rates. Ten percent of respondents said a lack of certainty about their job and future income was making home buying difficult. Navigating the process of buying a home A home is the biggest purchase most people will ever make, so it's no surprise that when asked which parts of the home-buying process were most confusing to them, the greatest number of respondents (41%) ranked finding the right property as their top issue. Thirty-eight percent were confused by mortgage options. True, there are many different types of mortgage loans and endless jargon (APR? FHA? DTI? The acronyms alone could short-circuit a homebuyer's brain.) Home inspection reports are confusing for 32% of people, while 31% are stymied by paperwork. Negotiating with sellers is a point of confusion for 31%, while 26% struggle with finding a real estate agent. Technology has been a help to many home shoppers. Almost two-thirds (65%) have used an online property listing platform such as Zillow or Redfin. Online lenders have helped 41% of respondents. And 39% have used virtual or augmented reality for property viewing, with 27% using drone photography. Virtual home tours are especially helpful to those who are buying a home without visiting it in person. Forty percent of respondents were willing to buy a home sight unseen if it meets their criteria and budget, but 39% are not (and 21% were iffy). Among those who were willing to shop from afar, most shoppers were savvy and planned to use one or more methods to mitigate risk: 55% would request additional info from the seller/real estate agent.49% would thoroughly research the property and neighborhood online.46% would hire a local pro to inspect the property.43% would explore virtual or augmented reality technology for property viewing.42% would seek advice from a real estate attorney about contracts and contingencies. Budgeting challenges and strategies Notwithstanding concerns about high home prices and inadequate down payment savings, fully 81% of homebuyers were very or somewhat optimistic that they would be able to purchase a home within their budget in the next six months. Sadly, about one in five buyers weren't feeling so hopeful. Creating a home-buying budget How much do homebuyers plan to spend on their new abode? With home prices already averaging over $400,000 and forecast to continue to rise moderately in 2025, more than 1 in 4 survey respondents (29%) were budgeting between $250,000 and $499,999. Fifteen percent of survey takers were looking for a bargain, planning less than $100,000. Another 23% thought they would spend between $100,000 and $249,999. A quarter of shoppers thought they would spend between $500,000 and $999,999, with 7% budgeting more than $1 million. Interestingly, more than half of respondents whose home budget was $500K or higher have a household income of less than $100,000 per year. Some of these people could be relying on the sale of a first home to fund a second home and may even make a cash purchase. For the rest, an annual income of $100,000 typically equates to a home-buying budget in the neighborhood of $300,000. Would-be homeowners were using several methods to establish their budget. Forty-eight percent were assessing their current budget, while 37% used an online home affordability calculator. Consulting a financial advisor was also popular: 36% of people used this method. Reviewing credit scores and reports was a popular step for 36% as well. A third of shoppers (33%) assessed their debt-to-income (DTI) ratio. Twenty-seven percent got preapproved by a lender as a way of determining their budget. Down payments: Doing the math The largest up-front expense associated with buying a home is usually the down payment. Here's what shoppers were planning to spend. 7% of respondents were exploring zero-down-payment options.10% planned to put down less than 5%.19% planned to put down 6%-10%.30% planned to put down 11%-20%.23% planned to put down 21% or more.10% of respondents weren't sure how much they would put down. Buying a home with a small down payment is possible with planning, and some government-backed loans, such as VA loans (backed by the U.S. Department of Veterans Affairs), don't require a down payment. Lenders may also offer a low-down-payment option for qualified first-time homebuyers. Money-saving tips from homebuyers An overwhelming majority of homebuyers-92%-have made changes in their money habits in order to save money for their home purchase. About half (49%) have trimmed nonessential expenditures and almost the same number (45%) have increased contributions to their savings. A significant number (41%) have found a side hustle to earn more income, while 26% have downsized their current living situation. About one-fourth have sought help from family or friends. The survey suggests that buyers will continue to employ saving strategies after they close on a property, as ongoing homeownership costs were a significant concern for many respondents. Top worries included maintenance and repairs (a concern for 47%), followed by property taxes (46%), making mortgage payments (45%), affording home insurance (39%), and covering utilities costs (30%). One in four people said homeowners association costs were a concern. In fact, about 30% of U.S. housing stock is in a community governed by an HOA, according to NAR. Choosing a lender As homebuyers save money and search for a property, they're also carefully weighing the second most critical decision in the home-buying process: selecting a lender for their mortgage loan. Roughly 1 in 4 homebuyers is paying all-cash for their purchase, an all-time high, according to the NAR. But among those who must borrow, SoFi's survey found that interest rates were the top factor when comparing mortgage lenders. They were most important to 64% of respondents. Half of survey-takers said closing costs were a key factor, while 48% had their eye on closing costs when comparing lenders. Special programs and incentives were an important comparison point for 40%. Reputation and customer satisfaction were important to 39% of buyers. Getting to the loan approval Just over half of survey respondents (53%) had completed a full loan application in their current home-buying process. One in 4 (26%) had applied for a conventional loan, while slightly more (28%) had applied for an FHA loan, backed by the Federal Housing Administration. (Use of FHA loans by first-time homebuyers has declined significantly, from 55% in 2009 to 24% in 2024 according to NAR.) Twenty-three percent had applied for a loan backed by the United States Department of Agriculture (USDA), while 12% had applied for a VA loan. Some, of course, had applied for more than one type of loan, and a small percentage (5%) applied for a type of financing not listed here. Awareness of government-backed loan options was fairly strong, with almost half of homebuyers (49%) having heard of FHA loans, 41% being aware of USDA loans, and 38% having some knowledge of VA loans. Almost half (49%) were also aware of rent-to-own agreements, a less common form of financing. About a third (34%) were aware of interest-only mortgages. The takeaway Today's homebuyers are most concerned with the financial aspects of the home-buying process, with finding an affordable property, saving for the home purchase, and comparing lenders' interest rates topping their list of important factors. The good news is that, despite high home prices and stubborn interest rates, more than 4 in 5 buyers were optimistic about completing the home-buying process and making their purchase within the next six months. FAQ What is the process of buying a home? The process of buying a home starts with determining what you can afford and planning for a down payment, if you can afford one. Seeking mortgage preapproval can help you understand how much you might be able to borrow. Once you have a sense of your budget, working with a real estate agent can help you locate properties. If you find your sweet spot, you'll make an offer, finalize your home loan, negotiate with the seller and, ultimately, close the deal. What are the 5 stages of buying a home? The five stages of buying a home are planning (setting your budget, determining your down payment), preapproval (getting preapproved for financing), searching (you'll find a real estate agent and identify a property), negotiating (you'll get an inspection and go back and forth with the seller), and finalizing (you'll solidify your financing and go to the closing table). Can I move in on closing day? You can move in immediately once you close on a house, as long as your contract doesn't stipulate a different occupancy date. What are closing cost fees? Closing costs are fees paid to the team that helps get you into your new home. These can include fees for the appraiser and title company, lender fees, and more. As a general rule, closing costs average 3% to 6% of your mortgage loan principal. What are the 4 C's when buying a home? The 4 C's of home buying are the things that a lender will consider when deciding whether to approve your home loan application and determining what interest rate and terms you qualify for. They are Capacity (ability to repay the loan), Capital (funds available to you in the form of savings and other assets), Collateral (the value of the property that will be the collateral for the loan), and Credit (your credit scores and history). This story was produced by SoFi and reviewed and distributed by Stacker. © Stacker Media, LLC.
Miami Herald
21-05-2025
- Business
- Miami Herald
Can Trump's Tariffs Help Create a ‘Golden Age' of US Manufacturing?
President Donald Trump has said he wants to return the United States to a "golden age" of manufacturing and is trying to force the issue for many industries by slapping high tariffs on foreign products. However, their implementation, marked by abrupt shifts, pauses and fluctuations in levies, has sparked instability across the U.S. economy, as well as rattled global markets and longstanding partnerships. To some, like former Trump White House adviser Steve Bannon, the initial disruption is the path to a "robust," "hegemon-like," "reindustrialized" America—one that promises to put tens of thousands back to work in well-paying manufacturing jobs. Others, like Colin Grabow, associate director at the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies, argue the entire premise of reshoring and reindustrialization is flawed, as American manufacturing isn't on the decline, just manufacturing employment. Total industrial production in the U.S. is on the rise, rebounding from a sharp dip in April 2020 during the COVID-19 pandemic and returning to around 2018 levels, according to Federal Reserve Economic Data, or FRED. Industrial output now surpasses the heyday of American factories—thanks largely to efficiency gains and technological innovation. In the 1950s, manufacturing made up almost 30 percent of America's GDP, according to the Federal Reserve Bank of St. Louis, although that has since dropped to about 10 percent. Yet the U.S. remains the world's second-largest manufacturer, behind only China and well ahead of the third- and fourth-place contenders, Japan and Germany. Despite the recent rebound in output, manufacturing employment has steadily declined over the past few decades—a core concern for Trump supporters rallying around the promise of reshoring, which promises to bring tens of thousands of jobs back stateside. Manufacturing jobs in the U.S. hit a peak in 1979, with over 19 million people employed in the sector, according to the U.S. Bureau of Labor Statistics. Forty years later, manufacturing jobs accounted for less than 13 million in the U.S. Manufacturing's falling share of employment over this time has coincided with job growth in service-providing industries, including professional and business services, education and health services, and leisure and hospitality, BLS data shows. Some experts, like Andrew Yang, a former presidential candidate and founder of the Forward Party, point to automation for the major manufacturing job losses. Others acknowledge that automation played a role but also point to China's entry into the World Trade Organization in 2001, arguing that access to cheaper foreign labor markets has siphoned off American jobs. Abe Eshkenazi, CEO of the Association for Supply Chain Management, called it "extremely fickle" to bring back manufacturing for certain industries, specifically apparel and textiles, due to the labor costs. Even laptops, semiconductors and other electronics could be tough to make in the U.S. "We really like to get started young with [potential workers], letting them see that perhaps their next career move is here in Macomb County. Even if they go off to college they can come back here," Rowinski added. "We have seen an uptick in the number of international businesses that are looking for a footprint here in Macomb County." The majority of plans for U.S. manufacturing is focused on , their batteries and semiconductors. In Arizona, Taiwan Semiconductor Manufacturing Company is expanding its U.S. manufacturing investment by an additional $100 billion. The company announced in March that it has plans for three new fabrication plants, two packaging facilities and an R&D team center. It is the largest single foreign direct investment in U.S. history and is expected to create tens of thousands of jobs, according to the company. Nearby, in Texas, Samsung made a $17 billion investment in manufacturing in 2021, which the company said would create 1,800 jobs over the next decade. Tesla is also planning to invest nearly $200 million to open a plant near Houston and county officials estimate the plant could employ up to 1,500 people, with salaries ranging between $50,000 and $150,000. But the real winners in the manufacturing renaissance in the U.S. are southern states, which accounted for nearly two-thirds of the increase in manufacturing facility construction in the two years to April 2024, data released last year showed. Playing in the South's favor is the number of "right to work" states, meaning people can't be obligated to join a union even if their employer has one. It has the potential to keep labor costs down, and North Carolina, South Carolina and Georgia, where manufacturing is rising, has some of the lowest union membership rates in the country. Electricity in the South also tends to run lower than other areas of the country, reducing overhead costs for a factory. Even if there is a rise in manufacturing jobs and people wanted to fill them, Port of Los Angeles Executive Director Gene Seroka noted that it probably won't be very big and the industry certainly won't look like it did decades ago. A recurring theme in Trump's manufacturing push is what Grabow calls "a kind of politics of nostalgia"—a "romanticized," rose-colored-glasses vision of the assembly line days where union jobs provided for the family. This account does not fully acknowledge the realities then or the automated, high-tech reality of today's industry, which Yang said is factories filled with "robot arms as far as the eye can see." "What you're not seeing is investment and reshoring among American firms," Yang told Newsweek in response to Trump's tariff rollout. "What you're disinvesting." Yang warned that these blanket tariffs trigger "tougher pricing on all of [manufacturers'] components," followed by "tougher markets when they try and sell," because if they sell abroad "their margins will be lower." The result, he argued, isn't a manufacturing hiring boom, but instead a wave of layoffs and disinvestment in the industrial sector. "The tariffs as a reindustrialization policy are really boneheaded, and destructive," Yang said. Compounding the issue is the reality that reshoring a supply chain isn't an overnight shift; it's a yearslong process that hinges on long-term confidence in economic policy, several experts told Newsweek. Without that stability and predictable trade policy, many companies will be hesitant to commit to any expensive, long-term plans, leading to less investment into American supply chains. With such a deep investment needing to be made, it's unclear if America could surpass China's production in a manufacturing war. China did not become a manufacturing powerhouse by chance. Chinese leader Deng Xiaoping's reforms, beginning when he came to power in 1978, were aggressive and targeted and required Beijing to relinquish a level of state control. Experimental special economic zones in southern China, large industrial parks where logistics and supply chains became centralized, were key to the transition into a relatively freer market. Foreign investment arrived slowly at first, then all at once, drawn by tax breaks, favorable regulatory environments and the availability of manpower and machinery. Vertically integrated supply chains, as well as rail and port infrastructure that sprang from hubs like Dongguan and Shenzhen, on the border with Hong Kong, facilitated the rise of players like telecoms giant Huawei and EV titan BYD. By 1998, China's population had reached 1.25 billion. Its then leader, Jiang Zemin, declared that the newly established World Trade Organization "would be incomplete without China," a position backed by the United States under the conviction that its formal entry into global supply chains would benefit the U.S. In 2001, with U.S. manufacturing employment in decline, China joined the WTO with a labor surplus and a myriad of future entrepreneurs among its ranks. "In the 1990s, China couldn't provide enough jobs through the state sector alone. There was a push to get folks off the 'iron rice bowl' and into the private sector. Beijing supported this effort by supplying facilities and equipment, and favorable policies helped further pave the way. Many Chinese interpreted these official initiatives as a broader green light for entrepreneurial activity," Paul Midler, author of Poorly Made in China, told Newsweek. In the early 2000s, factory owners worked together to drive China's rise to the top of the manufacturing world, Midler said. They shared supplier leads and traded technical knowledge and production shortcuts. "Information flowed fast and the network effects were powerful, creating a momentum that outsiders rarely saw and still don't fully understand," Midler said. Chinese manufacturing today accounts for roughly one-third of global output, the United Nations Industrial Development Organization estimates, a higher share than North America and Europe. China positioned itself at the center of global manufacturing by partially opening up to the rest of the world at the right time, incentivizing companies to move their manufacturing abroad. A sizable portion of its society still shares the characteristics of manual labor, toiling for long hours and sleeping in dormitories, sometimes 10 to a room. Last year, nearly 300 million Chinese people—over one-fifth of the population—were classified as migrant workers who made a living in cities where they did not officially reside, according to government data. But China's rising middle class and the emergence of high-value sectors like IT have also forced its leaders to reckon with cultural shifts associated with a much richer and smarter society. In recent years, the Chinese tech industry has rebelled against the expectation of grueling and illegal "996" schedules—9 a.m. to 9 p.m., six days a week. For years, the economic trend lines looked favorable to Beijing, which had spent decades shaping industrial policy. Made in China 2025, a 10-year blueprint to upgrade Chinese manufacturing in 10 strategic sectors, was perhaps the clearest articulation of the grand plan to dominate old and new industries including IT, robotics and green tech, by not only becoming self-reliant but by enlarging the critical dependencies of others on China, too. In automation, where successful integration can free up valuable human capital in every field, China has a commanding foothold. In 2023, China ranked third in the world for robot density in the manufacturing industry, behind South Korea and Singapore, according to the International Federation of Robotics. The United States was 10th. China pushed its risky model for globalization to the limit. As it chipped away at strategic industries overseas, including in the Global South, it expected the world to accept the same dependencies that Beijing itself would never countenance. "It's a model based on the wrong assumption that China is not big enough for the world. It's the other way around—China is too big for the world. China could produce for the moon if it were populated, but it isn't, so until we find another planet, China's model is wrong," said Alicia García-Herrero, chief economist for Asia-Pacific at the investment bank Natixis. "It's not just the U.S.—everybody is going to say: 'Wait a minute. Balance your model. This cannot be that you produce everything for everybody, everywhere.' China would not like to be deindustrialized either." The U.S. has little to gain by copying the Chinese model, even in part, García-Herrero told Newsweek. America's strengths lie in innovation, university and industry linkages, and access to other free markets. It will need the help of allies near and far—Mexico and especially India can build robots, too—and their cooperation in friendly supply chains ought to be won with carrots rather than sticks, she said, because "the U.S. cannot become self-reliant on its own." China's state-run media has largely dismissed Trump's pledge to revitalize American manufacturing as a means of addressing economic security concerns, but the derision appears to miss the point. While the U.S.'s market-oriented economy will not let it produce everything it needs, for everything else, non-Chinese alternatives will emerge. Chinese goods may continue to flow into the U.S. market via existing transshipment routes or by way of Chinese-owned manufacturing plants in third countries. But on the whole, the world seems to be headed toward a two-way split. Although many still see full divestment from China as high unlikely, especially for critical materials like rare earth metals, markets have a way of recalibrating themselves after a major shock, such as in the pandemic. It took China 15 years to become the world's factory and it could take half that time to establish new supply chains with multiple countries, García-Herrero said. Liu Pengyu, a spokesperson for China's embassy in Washington, D.C., said: "The achievements of industries such as automobiles and shipbuilding in China are the result of enterprises' technological innovation and active participation in market competition." "Economic and trade cooperation between China and the United States is mutually beneficial. Forceful decoupling will not only undermine the normal trade and investment but also hurt the stability of production and supply chains between the two countries and globally. This is not in the interests of any party, including the United States," Liu told Newsweek. Recent years may not have been branded as a reshoring revolution quite like Trump's but they've quietly fueled a boom in U.S. factory construction. For Democratic Senator Tammy Baldwin, the push for increased American manufacturing stems from national security concerns, telling Newsweek "our national security is in jeopardy when we cannot make things here because we have lost the capacity to do so." She noted that the CHIPS Act, which was passed under former President Joe Biden with bipartisan support, created incentives to bring back semiconductor manufacturing to the U.S. as a matter of national security. "What we're spending building factories, adjusted for inflation, in 2024 was twice what it was in 2019," Dean Baker, economist and co-founder of the Center for Economic and Policy Research, said. "We've never seen a boom like that" in the postwar era, he added. According to FRED, total manufacturing construction spending topped $234 billion as of March 2025—a dramatic rise over the past decade. While the focus of U.S. manufacturing conversations is on semiconductors and cars, when it comes to what America is making, food, beverage and tobacco products are highest on the list. They account for about 17 percent of gross output in dollars—the highest of any subsector—according to the Department of Commerce. Chemical products plus petroleum and coal products are tied for second at 13 percent, followed by cars at about 10 percent. Bannon, a self-described populist and prominent figure in crafting the Make America Great Again movement, called out American manufacturing as little more than "final assembly" work—especially in the auto industry, where factories often import all the parts and simply put them together in the U.S. Instead, he argued, Trump's focus is on "bringing high value-added manufacturing jobs back." In addition to those jobs, Bannon described an "entire ecosystem" to be developed around the factories, from small supporting services and businesses like coffee shops, restaurants and stores for factory workers to go to nearby, to larger-scale operations such as consulting and engineering design firms that support the industry more broadly. Indeed, manufacturing can have a trickle-down effect. For every $1 spent in manufacturing, there's a $2.64 impact to the overall U.S. economy. And for every one worker in manufacturing, another 4.8 workers are added to other sectors. You need construction workers to build factories, people to supply the materials and truckers to move the product. And if a manufacturing boom hits an area and leads to an increase in people moving there, that area will need to offer more places to eat and shop, among other services, leading to more job creation. "That one manufacturing job is going to crowd in jobs in non-traded goods and services that help that manufacturing job to exist. So reshoring manufacturing would lead to expansion in other lines of business," Gordon Hanson, a Professor of Economics, Harvard Kennedy School, told Newsweek. The service business is "very much a gig economy, but here in manufacturing you have a chance to get a skill set that you can use over a long period of time and actually have a high paying job," Bannon said. He maintained there's a strong appetite for these roles, as did Baldwin, who described them as "very attractive," noting that the plants are "not your grandfather's factory." However, it's possible that even if there is a rise in manufacturing, workers won't be the ones benefiting the most. Or, at least not in the traditional sense. Factories will be driven by artificial intelligence and it's possible those jobs will go to college graduates who know how to program the technology. Yang warns that automation is going to slash what may be thought of as the typical factory role. "The industries that are most likely to need human workers tend to be the dirtiest, the least appealing, and the cheapest," he said. Related Articles Americans' View of the Economy Reverses Four-Year Trend in New PollChina's Next-Level AI Could Overtake US: New ReportChina Pauses Sanctions on US Companies in Trade War ClimbdownAutomakers Change Production, Sales Plans Based on Trump TariffsUS Economic Outlook Darkens as Major Forecast Records Steep DropGM Ends US Vehicle Exports to China Amid Trade Tensions 2025 NEWSWEEK DIGITAL LLC.
