As usual, China ($29.7) topped the list of countries with which we have trade deficits. The other top ten were the \u201cEuropean Union ($25.5), Switzerland ($22.8), Mexico ($15.5), Ireland ($12.4), Vietnam ($11.9), Canada ($11.3), Germany ($7.6), Taiwan ($7.5), [and] Japan ($7.4).\u201d<\/p>\n\n\n\n
The good news is that reshoring is increasing and improving our country\u2019s self-sufficiency capacity for goods essential to our economy and national security according to a number of recent surveys and reports.<\/p>\n\n\n\n
The article<\/a> titled, \u201cThe Rise of Onshore Manufacturing\u201d in the January-February 2025 issue of Design2part magazine, reports that \u201cResearch released in November by global management consultancy Bain & Company<\/a> revealed an acceleration in strategic reshoring moves by businesses worldwide\u2014to shift operations and supply chains closer to their home markets\u2026The survey found that the percentage of CEOs and chief operating officers who reported their companies are planning to bring supply chains closer to market rose from 63 percent of those surveyed in 2022, to 81 percent in 2024\u2014a sharp 18 percent increase\u2026Survey results show that the proportion of companies reporting moves to shift operations out of China rose from 55 percent in 2022, to 69 percent in 2024.\u201d<\/p>\n\n\n\n The research stated \u201cFactors such as geopolitical turbulence, rising costs, and pressures for reduced carbon footprints are fueling the trend toward onshoring\u201d In addition, \u201creshoring as having been further stimulated by the 2022 Inflation Reduction Act (IRA). The IRA offers U.S. companies subsidies and tax credits that incentivize reshoring and near-shoring to boost domestic manufacturing and job creation\u2026Moves toward reshoring of semiconductor manufacturing have also been intensified by the U.S. CHIPS Act, which put in place tax incentives and $52 billion in funding to stimulate U.S. domestic production of chips.\u201d<\/p>\n\n\n\n The results of this research are corroborated by \u201cKearney\u2019s 2024 annual Reshoring Index (KRI) report,<\/a> which \u201cconcludes that as reshoring and nearshoring activity increase, \u2018Made in America, for America\u2019\u2026describes the foreseeable future of industrial manufacturing in the Western hemisphere.\u201d<\/p>\n\n\n\n The KRI was launched in 2018 to track the extent to which manufacturers are reshoring manufacturing from Asia back to the US.\u00a0 \u201cThe Reshoring Index is determined by dividing the import of manufactured goods from the 14 Asian low-cost countries by the US domestic gross manufacturing output to calculate a manufacturing import ratio (MIR)\u201d<\/p>\n\n\n\n Based on data from 2023, the report showed \u201cUS imports from 14 Asian LCCRs declined by $143 billion, from $1,021 billion in 2022 to $878 billion in 2023. The majority of the drop in Asian LCCR imports was caused by a 20 percent (or $105 billion) reduction in Chinese imports.\u201d However, \u201cMexico surpassed mainland China as the largest exporter to the US. US imports of Mexican manufacturing goods grew from $320 billion to $422 billion (32 percent).\u201d<\/p>\n\n\n\n The Kearny report also stated: \u201cThirty-eight percent of manufacturing executives responding are looking to continue to reshore or nearshore operations from mainland China, while another 25 percent are discussing moving operations away from India, and 14 percent are thinking about exiting Vietnam.\u201d<\/p>\n\n\n\n The organization that originated the term \u201creshoring\u201d is the Reshoring Initiative founded by Harry Moser in 2010 to help manufacturers return manufacturing to the U. S. by changing the mindset from \u201coffshored is cheaper\u201d to \u201clocal reduces the Total Cost of Ownership.\u201d A Free Total Cost of Ownership (TCO) worksheet calculator is available at www.reshorenow.org<\/a>.<\/p>\n\n\n\n The latest e-news by the Reshoring Initiative includes this link to take the annual industry-wide Reshoring Survey<\/a> that examines manufacturers\u2019 decisions on whether to reshore factories and supply chains. The results of the survey will be released in April.<\/p>\n\n\n\n Last year\u2019s report featuring 2023 data showed that reshoring is continuing to climb, adding 263,583 jobs, the second highest year on record compared to 349,408 jobs in 2022. The preliminary data for 2024 is 244,940. The website reports \u201cAs of March 2023, we have recorded over 6400 cases of manufacturing companies that have brought work back to the U.S.\u201d The total number of jobs created by reshoring and FDI came to 1,214,3343 at the end of 2024. <\/p>\n\n\n\n Reprinted with permission of the Reshoring Initiative<\/p>\n\n\n\n We lost 5.8 million jobs between 2000 to 2020, and it\u2019s taken 11 years to add the first million jobs, but only three years to add the second million. Even at the current faster rate, it would take at least another 12-15 years to recoup the 3.8 million jobs we lost.<\/p>\n\n\n\n The key findings of the 2024 report were:<\/p>\n\n\n\n Foreign Direct Investment refers to foreign companies either investing in the U.S. by expanding existing U.S. plants or building new plants.<\/p>\n\n\n\n The report noted:<\/p>\n\n\n\n Since these geo-political threats have only increased in the past year, there is a greater incentive to consider reshoring. According to this report, the number of CEOs actively reshoring went from under 10% in 2012 to nearly 90% in 2023.<\/p>\n\n\n\n The latest e-news<\/a> from the Reshoring Initiative states: \u201cthe mere threat of tariffs seems to be doing a sufficient job of defining the objective: the U.S. must boost domestic manufacturing to strengthen national security, reduce the trade deficit, and support economic stability. And the Trump administration appears serious about making that happen. Regardless of how tariffs are implemented, the pressure is driving companies to rethink their supply chains and commit to localization.\u201d <\/p>\n\n\n\n However, the e-news cautions: \u201cWhile the mere threat of tariffs could be enough to firm up some of the plans, many projects will only move forward when the tariffs are in place and likely to remain in place for at least the next four years. As Michael Todd Speetzen?<\/a>of Polaris said, \u201cWe have a presence that we would be able to leverage if we viewed this as a more permanent situation.\u201d The Reshoring Initiative\u2019s industrial policy says that if tariffs are used, they should be \u201cforever\u201d or at least until trade in the product or with the other country becomes balanced. Companies will not make large investments if the rules are likely to change.\u201d <\/p>\n\n\n\n While tariffs are being criticized by economists and those who would be subject to the tariffs, it appears that tariffs could become the major driver of reshoring by American manufacturers. It could also accelerate Foreign Direct Investment as more foreign companies expand existing plants in the U.S. or build new manufacturing plants in the U.S. to avoid tariffs.<\/p>\n\n\n\n Some economists say that tariffs protect and prop up inefficient American manufacturers that should be allowed to fail if they can\u2019t compete against foreign competitors.<\/p>\n\n\n\n![\"\"](\"https:\/\/savingusmanufacturing.com\/blog\/wp-content\/uploads\/2025\/03\/image.jpg\")
<\/a><\/figure>\n\n\n\n\n
\n