"I found this analysis of the components of a typical 'designed in America' product to be fascinating.

"The article however stops short of stating the conclusion that the US (as distinct from Apple) loses money (gold in the old days!) on every iPhone sold in America, and needs to balance this with something else. Looking at relative pricing, the most promising new export is perhaps going to be LNG from shale gas!!"

Eoin Treacy's view Thank you for this insightful article by Andrew Batson for the Wall Street Journal. Here is a section:

One widely touted solution for current U.S. economic woes is for America to come up with more of the high-tech gadgets that the rest of the world craves.

Researchers estimated the iPhone added $1.9 billion to the U.S. trade deficit with China last year. Above, an Apple store in Palo Alto, Calif.
Yet two academic researchers estimate that Apple Inc.'s iPhone-one of the best-selling U.S. technology products-actually added $1.9 billion to the U.S. trade deficit with China last year.

How is this possible? The researchers say traditional ways of measuring global trade produce the number but fail to reflect the complexities of global commerce where the design, manufacturing and assembly of products often involve several countries.

"A distorted picture" is the result, they say, one that exaggerates trade imbalances between nations.

Trade statistics in both countries consider the iPhone a Chinese export to the U.S., even though it is entirely designed and owned by a U.S. company, and is made largely of parts produced in several Asian and European countries. China's contribution is the last step-assembling and shipping the phones.

So the entire $178.96 estimated wholesale cost of the shipped phone is credited to China, even though the value of the work performed by the Chinese workers at Hon Hai Precision Industry Co. accounts for just 3.6%, or $6.50, of the total, the researchers calculated in a report published this month.

This article helps to illustrate the interdependence of the world's major economies and demonstrates that caution is warranted when interpreting trade flows in an increasingly globalised economy. Many economists have voiced concerns about the threat of protectionism. However, this assumption presumes that populists will win power in a number of countries. This can't be ruled out but in an environment where inflationary pressures are beginning to be exerted, protectionism would be particularly counterproductive since globalisation has had a marked disinflationary effect on the Western economies for much of the last thirty years.

I agree the USA needs to at least narrow its trade imbalance with the rest of the world. As you mention unconventional natural gas has the potential to be a major export and the USA is also an important exporter of a number of agricultural commodities. Ben Bernanke recently said on 60 Minutes that simplifying the tax code would also help improve competitiveness. I also believe a more can-do attitude to encouraging businesses to situate manufacturing in the USA would also prove beneficial.