US manufacturing sector reaping benefits of reshoring
foxbusiness.comFOX Business’ Lydia Hu discusses the Reshoring Initiatives efforts to encourage companies to return manufacturing to the U.S.
The U.S. manufacturing sector is in the midst of revitalization as global supply chains reshuffle in response to changing economic conditions and geopolitical shocks, reversing a decades-long trend of American industrial capacity moving overseas.
Manufacturing firms began to offshore their operations from the U.S. to countries with lower labor costs several decades ago. But the COVID-19 pandemic, the war in Ukraine and concerns over China potentially looking to compel Taiwan’s unification with the mainland by force have driven efforts to reshore manufacturing – in addition to government incentives and rising labor costs overseas.
Chris Semenuk, who manages the Tema American Reshoring ETF, told FOX Business that it took the U.S. «30 years to kind of relinquish its lead» as a manufacturing powerhouse and that it’ll take «at least 20 years to reindustrialize the country» – a trend he thinks is well underway.
«I think that companies over the years have noticed that they have vulnerabilities in their supply chain, dependencies on suppliers or maybe dependencies on certain markets,» Semenuk said. «Reshoring is a response to, or an unwinding of, some of those dependencies and we’re in the early stages and I think that it’s a long-term, durable trend that will work itself out over at least a couple of decades.»
CRAFTSMAN FACTORY IN TEXAS SHOWS CHALLENGES OF RESHORING MANUFACTURING
Manufacturers are increasingly looking to bring their operations back to the U.S. from overseas. (iStock / iStock)
For years, China’s low labor costs made it an attractive destination for manufacturing firms, but the
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