The country’s industrial prowess is also evidenced by foreigners’ appetite for investment in U.S. manufacturing. As of 2021, the stock of foreign direct investment (FDI) in the sector stood at over $2.1 trillion, while 2021 also saw $121.3 billion of new FDI flow into domestic manufacturing—an amount greater than any other industry.
Beyond their direct investment in the sector, foreigners are also eager consumers of U.S. manufactured products. In 2018, the United States ranked second in the world in merchandise exports and third for exports of “manufactures,” and from 2002 to 2021, the country’s manufacturing exports more than doubled. In 2019, U.S. firms exported over $1.3 trillion in manufactured goods, including aerospace and aircraft parts ($60.1 billion), integrated circuits ($41.2 billion), and medical instruments ($29.4 billion). According to the World Bank, approximately 20 percent of all U.S. manufactured goods exports in 2021—totaling more than $169 billion—were “high technology” products (i.e., “products with high [research and development] intensity, such as in aerospace, computers, pharmaceuticals, scientific instruments, and electrical machinery”).
Among the destinations for these goods are other leading manufacturing countries. In 2020, for example, the United States exported $17 billion worth of electrical machinery to China, $6.6 billion in optical and medical instruments to Japan, and $16 billion worth of transportation equipment to Germany. The previous year, the European Union alone imported $35.7 billion worth of aircraft from the United States.
That so many Americans fail to appreciate the vast size and scale of U.S. manufacturing is perhaps at least partially explained by the fact that many retail purchases by consumers are for products imported from abroad. But much of what U.S. manufacturers make are items whose production requires advanced know-how that consumers rarely encounter. In 2020, for example, the United States was the world’s leading exporter of medical instruments, gas turbines, and aircraft parts—goods not often found on retail store shelves.