For years, manufacturing left the U.S. Now, it’s begun to come home. Here are 5 things to know. | Milwaukee Journal Sentinel
As the dust settles from the disruptions caused by the COVID-19 pandemic, U.S. companies find themselves at a critical juncture, reevaluating their global supply chains with a keen eye on resilience and reliability. Industries like electronics and pharmaceuticals, vital for national security, face the brunt of supply chain vulnerabilities, prompting a closer look at reshoring or bringing manufacturing back home.
Contrary to popular belief, China isn’t always the cheaper option. While manufacturing in the U.S. averages a 30% higher cost, comparing expenses like shipping, tariffs, and currency rates can make domestic production competitive. The Reshoring Initiative emphasizes the importance of considering the “total cost” through tools like its Total Cost of Ownership calculator, which is recognized by the U.S. Department of Commerce.
Consumer preferences play a significant role, with around 65% of global customers expressing a preference for locally-made products. This preference underscores the potential for companies to leverage brand perception by localizing manufacturing. Requiring country-of-origin labeling could further empower consumers to support domestic production.
However, challenges loom on the horizon, particularly regarding workforce shortages. Without addressing the deficit in skilled labor, the U.S. risks a shortage of 2 million workers in manufacturing by 2030, according to the U.S. Census Bureau. Initiatives like apprenticeship programs and immigration reforms, such as increasing H-1B visas for skilled workers, are crucial to bridge this gap.
While subsidies offer short-term relief, a sustainable solution is a well-designed national industrial policy. This policy could level the playing field, encouraging reshoring based on companies’ self-interest rather than temporary incentives. Additionally, foreign investments play a pivotal role in bridging supply-chain gaps and fostering self-sufficiency in manufacturing………..
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How might a well-implemented national industrial policy foster reshoring and self-sufficiency in U.S. manufacturing, balancing short-term subsidies with long-term sustainability?
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A well-implemented national industrial policy can encourage reshoring and self-sufficiency in U.S. manufacturing by providing incentives for companies to bring their operations back to the country. This can be done through a combination of short-term subsidies and long-term sustainability measures.