tippinsights Editorial Board, TIPP Insights
Ross Perot Called the ‘Giant Sucking Sound’—Jobs Lost, China Rose, and Washington Let It Happen.
Most Americans know little about how global trade impacts their families. They knew even less thirty years ago. It was left to a fearless business leader who wanted to pursue presidential politics to educate America. No, we are not talking about President Trump.
That person, a pioneer in bringing the topic of trade to kitchen tables across America, was Ross Perot, about whom most Americans born during the Reagan era know little. Perot, a short man with a distinct Texas drawl, was a quintessential American business success story. He made billions when he founded a technology services company called Electronic Data Systems (EDS) in 1962 with just $1,000 and sold it to General Motors for $2.5 billion in 1984. The 1980s were the period when America’s mega-industrial corporations ventured into diversified industries unrelated to their core competence. This was the same kind of thinking that made General Electric buy NBC.
After the statute of limitations expired on his GM deal, Perot began another company in 1988, almost identical to EDS. He called it Perot Systems, which grew quickly, providing IT services to healthcare and government clients. Dell acquired the company in 2009 for $3.9 billion.
Perot died in 2019, but throughout his life, he was celebrated as one of the wealthiest businesspeople in the country. He was known for his patriotism, exemplified by funding the rescue of two EDS employees held in Iran. However, Perot’s most significant contribution to America came during the 1992 presidential campaign.
Sharing the presidential debate stage with two political veterans in Richmond – President George H.W. Bush 41, running for reelection after polling above 90% following America’s victory in the first Gulf War, and the Democratic candidate, Arkansas Governor Bill Clinton, a young, charismatic, and telegenic politician burdened by a host of character issues – Perot was not the least bit unnerved.
Using his folksy charm and pronounced accent, Perot argued against NAFTA, the North American Free Trade Agreement that the United States had with Mexico and Canada, claiming that it would lead to a massive loss of American jobs and manufacturing capacity.
We have got to stop sending jobs overseas. It’s pretty simple: If you’re paying $12, $13, $14 an hour for factory workers and you can move your factory south of the border, pay a dollar an hour for labor, have no health care—that’s the most expensive single element in making a car—have no environmental controls, no pollution controls, and no retirement, and you don’t care about anything but making money, there will be a giant sucking sound going south. So, if the people send me to Washington, the first thing I’ll do is get a big wet blanket and put it over that, because we’re not going to lose our jobs.
For the millions of us who watched that exchange live, Perot’s “giant sucking sound” became one of the most memorable lines in presidential debate history. More than thirty years later, his warning rings louder than ever, as President Trump’s new global tariffs aim to restore balance, attract investment, and revive U.S. manufacturing.
In 1992, there were approximately 17,618,000 American jobs in manufacturing. For March 2025, the preliminary estimate of American manufacturing jobs is approximately 12,950,000, based on the BLS Current Employment Statistics survey (seasonally adjusted)—meaning that there has been a drop of about 4.67 million jobs over the intervening 33 years. However, not all of the job losses are caused by outsourcing to countries with lower labor costs. Automation and technological advances have also contributed to the decline. Americans don’t buy transistor radios, portable cassette players, camcorders, pagers, and beepers—so there’s no need to make these products anymore.
Although China did not merit a mention in the 1992 debate, political leaders nonetheless had China in mind. In an undated clip, then-President Clinton spoke glowingly about a World Trade Organization agreement that he claimed would benefit the United States by expanding trade with China.
The WTO agreement will move China in the right direction. To advance the goals Americans have worked for in China for the past three decades. And, of course, it will advance our own economic interests…all we do is agree to maintain the present access that China enjoys. These tariffs, ranging from telecommunications products to automobiles to agriculture, will fall by about half or more over just five years. This is the first time our companies will be able to sell products in China made by workers here in America without being forced to relocate manufacturing to China, sell through the Chinese government, or transfer valuable technology. For the first time. We’ll be able to export products without exporting jobs.
Nearly every Clinton prediction made then has turned out to be untrue. China has leveraged WTO loopholes to dominate as a key player in the global trading debate, with its massive factories producing just about everything the world needs. However, China also uses its tariffs and policies to maintain that domination and stifle competition.
The country now leads numerous industries, including iron, steel, aluminum, textiles, cement, cell phones, personal computers, shoes, chemicals, toys, electronics, rail cars, and ships. China’s “Made in China 2025” (MIC 2025) program, which is supposed to end next month, has extended this dominance to ten new industries, including next-generation IT, robotics, Artificial Intelligence, aerospace, new energy vehicles, new materials, biomedicine, and agricultural equipment. The world saw how DeepSeek’s AI technology could threaten America’s tech giants at a fraction of the cost.
China is the world’s best at extending low-interest loans that are unavailable to companies in other countries. China absorbs domestic manufacturing output, forcing companies dependent upon state enterprises to consume products, thereby increasing economies of scale and lowering costs. It requires foreign countries that receive Chinese aid to source products from China, thereby helping open new markets for Chinese companies.
China also subsidizes companies that dump products in world markets at prices below cost so that it can weaken—and eventually wipe out—international competition. It has manipulated the value of the yuan, its currency, to keep it artificially low so that exports are cheaper (when priced in U.S. dollars). And it is ruthless in requiring foreign companies to share intellectual property with Chinese companies as a price to enter China’s huge market.
President Trump is now trying to correct decades of trade blunders—many born in Washington. Ross Perot would be the first to say: it’s about time.
