Despite Donald Trump's best efforts American factories won't leave Asia

A survey released in May found that fewer than 6 per cent of the companies that were shifting or considering moving production out of China were choosing the US as a new destination

International News : President Donald Trump likes to brag that he’s bringing manufacturing back to the US And indeed, with global trade slowing, the planet-spanning supply chains that have symbolized modern economic globalization do appear to be contracting.

But don’t be too quick to dismiss the idea of “borderless” production as a 1990s fluke. Even if their reach is more limited than before, far-flung supply chains are almost certain to remain a fact of global manufacturing. There are simply too many incentives for companies to continue to produce and source in every corner of the globe -- from the abundance of cheaper workers to technological capabilities and changing patterns of consumer spending.

Sure, some production that was “offshored” in the 1990s and 2000s from the US, usually to cheaper locales such as China or Mexico, may return. The Reshoring Initiative, an advocacy group, says 1,389 companies reported they were reshoring or making foreign investments in new manufacturing operations in the US in 2018, a 38 per cent increase from the year before. Trump’s tariffs aren’t the only motivating factor. The Boston Consulting Group Inc. points out that disparities in manufacturing costs and competitiveness between countries have also been narrowing, which gives manufacturers more flexibility to set up factories closer to home. Read More

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