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by sorcerer-mar 421 days ago
The difference between on- and near-shoring is pretty important, and I'm going to bet the trillion dollars in incentives played a far, far bigger role than the delta in people's resilience estimations between putting a factory in Mexico vs the United States.

Credit should go to all factors, but sorry it's foolish to think orchestration of a trillion dollars into exactly these sectors wouldn't play a huge role.
1 comments
potato3732842 421 days ago
>The difference between on- and near-shoring is pretty important,

Of course. I don't think many saw coming that we wouldn't be on friendly trade terms with Mexico and Canada.

> and I'm going to bet the trillion dollars in incentives played a far, far bigger role than the delta in people's resilience estimations

Which have you seen companies respond more swiftly to, opportunities to make money, or disruptions in their existing ways of making money? Which gets the CEO on the phone faster, a potential business deal or a prod outage?

Just about everyone experienced the latter during Covid. "Yeah we'd love to do all the electrical for your covid construction boom fueled McMansion development but switchgear is back ordered 18mo, sorry", and so on and so on across many industries. And they're all real salty about it.

I'm sure the incentives added fuel to the fire, but the way the Chinese economy stayed disrupted for longer really pained a lot of people in the US who depend on stuff from there to make money here.

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sorcerer-mar 421 days ago
> Of course. I don't think many saw coming that we wouldn't be on friendly trade terms with Mexico and Canada.

My point is that near-shoring is the obvious thing to do under the rationale you're talking about, but actually wouldn't show up in that chart.

Here's a comparison of the US vs Europe (which experienced similar China shocks):

https://www.atlanticcouncil.org/blogs/econographics/the-ira-...

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phil21 421 days ago
> prod outage

Depends on if the outage impacts the entire industry/sector or just his company. If the former, it's relatively fine because stock performance is going to be similar to competitors and investors won't be asking too many questions. Might be some wailing and gnashing of teeth but not too much action in the form of spending money on the problem.

I don't think many companies in my estimation took too many lessons from the COVID supply chain crises. If they did, the lesson was to simply outwait things. Everyone was having similar problems and you didn't be the single one of your sector to have re-shored production at triple the expense while your competitors simply spun back up once the Chinese factories got back on-line.

If it was such a compelling thing that was already happening we'd be seeing a lot more 'low value base component' manufacturing coming back, such as electronic components like resistors. So far from my basic understanding of the subject it's all the stuff quite high up the value chain instead. At best some things got near-sourced or moved around, with the raw inputs seemingly still coming from China in the end either way.

It would certainly be interesting to find some actual data here though.

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