[adventured]

Perhaps, however, the re-shoring is in fact happening. There has been a massive build out of new manufacturing facilities in the US over the last few years.

Near $120 billion spent on new manufacturing facilities in 2022 alone. The surge looks like this:

https://i.imgur.com/Bydq6Hb.png

The US manufacturing sector has added 900,000 jobs since 2014 (according to the US Bureau of Labor Statistics). It was at 12,081,000 manufacturing jobs in January 2014, and January 2024 is at 12,979,000. For the US, which is supposed to be a wilting manufacturer, that's a huge gain over a decade (including the pandemic hit, which slashed 700,000 jobs out temporarily; one guesses the figure would just be even higher minus the pandemic).

Manufacturers don't add a million jobs if they're not expanding presence. Even if they were expanding very slowly, they would do everything possible to avoid adding jobs/labor (most US manufacturing expansion in decades past came from productivity gains).

The US has modest corporate taxes, a good business regulatory environment, amazing capital markets, enormous economic scale, a single giant market, ports that can easily get you to Asia/Europe/Latin America, consumers, and labor. It makes perfect sense that at a time of growing risk of conflict with China, that the US would be reshoring.

[whimsicalism]

> The US has modest corporate taxes, a good business regulatory environment, amazing capital markets,

Yep!

> ports that can easily get you to Asia/Europe/Latin America, consumers,

Yep!

> and labor

Nope. Labor costs in the US are ridiculous and make it non-economical for most consumer manufacturing. This is why real output remains low and we are exploring 'friend-shoring.'

[andyferris]

Well… I believe labor in the US is cheaper than Australia, NZ, UK, and most of the EU. (I’m not sure about Japan). Basically all comparable countries in terms of wealth. So that’s something?

[xxpor]

There's 0 chance US labor is cheaper than the UK at this point.

US: >Real median household income was $74,580 in 2022

UK: >In the financial year ending (FYE) 2022, median household income in the UK before taxes and benefits was £35,000, increasing to £38,100 after taxes and benefits.

[rendang]

NZ is even lower per https://en.wikipedia.org/wiki/List_of_countries_by_average_w... so unless there is a big difference in the manufacturing sector specifically, it's probably also cheaper there

[HPsquared]

That combined with the house prices... ouch.

[andyferris]

Wait - the median income in the UK is higher AFTER tax is removed? The median person receives more benefits than pay tax?

[pjc50]

Something not quite right there, because at £35,000 you're not eligible for that many benefits. Unless this is somehow miscounting pensioners?

[oblio]

US labor is in no way, shape or form cheaper than EU labor, even with the higher taxes in the EU. Have you checked the average or median salary in the US and Germany, France, Spain, let alone any Eastern European country?

[wodenokoto]

None of which are the UK, Australia or NZ.

[oblio]

> and most of the EU.

...

[ponector]

Tesla pays 20-30$ per hour. Is it ridiculous and non-economical?

[faeriechangling]

There is Canada/Mexico for labour if you just want to get things on the same continent which still protects the US from supply chain shocks somewhat.

[acchow]

> It was at 12,081,000 manufacturing jobs in January 2014, and January 2024 is at 12,979,000.

That is 7.4% growth since 2014.

US population grew by 6.4% during that same period. Hard to see the "huge gain" here.

[chaostheory]

What people arguing against your points don’t understand is that globalism is coming to an end. It started when China initiated decoupling and started their ill advised wolf warrior diplomacy.

[justworkout]

A lot of the "it's time we moved away from China" corporations are moving their manufacturing from the authoritarian communist country of China to... the authoritarian communist country of Vietnam. Vietnam has loose regulations due to being undeveloped and seeking business just like China was 30 years ago. In a decade MBAs will be amazed when they find out Vietnam exerts total absolute control of their businesses just like China does.

Manufacturing hubs are shifting hands, but globalism isn't ending. Companies can still get away with paying $10 a day or less to people in some countries and they're never giving that up.

[csomar]

True but Vietnam hates China, so that will work. Also, the Vietnamese can pretend to be a democratic country in 10 years; so that they look cute in the eyes of your average American. You know, kinda like what the Korean or Taiwanese did.

[whimsicalism]

Taiwan is a democracy

[shiroiuma]

Unlike China, I don't see how Vietnam would ever be some kind of threat to world peace and order or western powers in general. It's not that large, it doesn't have an ongoing war with an important high-tech trading partner, it doesn't seem to have much interest in being a superpower, etc.

[justworkout]

Companies don't care about threats to world peace. They cared that China locked down cities, their factories, and exports. If world peace were their concern, there are a lot of countries they'd refuse to do business with. They usually only stamp their feet and whine when countries do things that affect their profit margins, like push for increased wages, environmental regulations, and locking up a factory to prevent disease spread.

One thing to keep in mind: a few years ago, South Korea with North Korea to allow corporations to do manufacturing in North Korea. [1] The result: mega corporations like Korea's Hyundai and Japan's Family Mart flooded in to take advantage of cheap (probably even slave) labor. It closed not because companies felt morally wrong about it--it closed because the governments forced it to close.

[1] https://en.wikipedia.org/wiki/Kaesong_Industrial_Region

[ponector]

Is it? From what I see, global trade is free as never been in previous century or any time in history before.

[lmm]

Nah, the brakes have definitely been thrown on over the last few years. The US has had back-and-forth with China and Canada, e.g. the huge tariff on that Embraer plane, export restrictions on computer chips, and I think the steel tariff dispute is still simmering away. The UK has pulled out of the EFTA and that's affected supply chains a lot. China has cut off the workarounds that allowed offshore ownership of stock in their companies, a whole lot of what was tolerated in Hong Kong is not being tolerated any more. And that's before you get into the Russia situation - cutting off SWIFT is pretty much unprecedented, and the oil price cap stuff is also new. Global trade is very much less free than a decade or two ago, and that trend is accelerating.

[ponector]

Russia is not fully cut from western financial system. Even few EU banks are there.

Price cap is poorly enforced. All economic sanctions applied to Russia are poorly enforced thanks to globalization and lack of political will of western countries.

Sanctions are severe on paper, but in real life just adds some extra friction.

Unfortunately we are living in times when there are only weak populists in the government.

I wish the next is president will be someone like Reagan, but it is impossible.

[chaostheory]

Yes, but that’s not the trend.

The US can no longer afford to be world police with its navy.

Russia is now outside of the US economic system, while relations with China continue to deteriorate. It will deteriorate further once China attacks Taiwan.

[ponector]

US-China tensions are not that huge at the moment.

Russia is not really cut off from the global trade.

Africa becomes more united and collected.

Globalization is still a trend.

[chaostheory]

US China relations continue to deteriorate because of China’s aggression in the South China Sea and continued decoupling aka de-risking.

Russia is cut off from the developed Western economy. Some NATO commanders are also warning that Russia will not stop at Ukraine.

Even if Russia and China weren’t on a war path, the US simply cannot continue to subsidize global defense of trade via our navy. Currently, only the UK and Japan have a sizable fleet of long range ships, but they still don’t compare to the US navy.

Yes, globalism is still here, but the trend is that it will be on a major decline in the coming years. Destabilizing geopolitics will only hasten it.

[Log_out_]

Common misconception but the US does not pay for its navy by itself. That is done by the world using a ever overprinted currency for reserve and trade. The US can print aka lend that money to set a navy to work. The world pays for its police.

Some hicks in the rust belt contribute and receive very little benefits from a fee trade empires existence and are thus usually left to there own devices by both parties.

[ponector]

Russia is cut off only on paper. In real life they do trade very well.

And yes, they will never stop because they have an empire mentality. Make Russian empire great again! Russian are ready to kill anyone and die for promise to get 2000$ per month from their government.

[csomar]

> Russia is not really cut off from the global trade.

Some people confuse the "global" trade to the American & Friends trade.

[ponector]

Russia is not even cut off from trade with USA. There are even messages that USA is buying some amount of Russian oil every month.

From the other hand, Russians can buy anything western they want, just with more friction and higher price. Even dual-purpose western components for army are freely available for them.

[Log_out_]

Imagine the anti liberal backlash that will come if the first gi dies from forces armed up by neoliberale trading. They will ride the ex-elites out of town on a rail, if they are lucky..

[whimsicalism]

in favor of 'friend-shoring' not really 're-shoring'

[SCM-Enthusiast]

> https://i.imgur.com/Bydq6Hb.png

Looks like an inflation graph to me.

[2devnull]

Without any source information it may as well be written in crayon. (No offense. At least op provided something to back their claim.)

[ethbr1]

Also, wouldn't be surprised if the drive towards minimal-latency shipping is having some evening effect.

Increased labor costs... versus rapid, $$ last-minute transport / port fees to hide latency across the Pacific.

At some point, it's just cheaper to pay the manufacturer more, if they can more rapidly respond to demand.

[bobthepanda]

Paying more just doesn’t work if a chokepoint is clogged up or closed. Chinese ports locking down, congestion at LA/Long Beach, Panama running dry, Suez being blocked, the Red Sea crisis, etc. It is making just-in-time inventory untenable.

Canada and Mexico have multiple entry points without as severe risk.