Latest news with #reindustrialization
Forbes
10-06-2025
- Business
- Forbes
Tariffs Alone Won't Bring Manufacturing Home—Here's What We Really Need
In 1961, President John F. Kennedy challenged America to land on the moon—and inspired a nation to rethink what was possible. That moonshot sparked a decade of unprecedented innovation and investment, laying the foundation for U.S. leadership in science, defense, and technology. Today, we're at a similar crossroads. But this time, the frontier isn't in space—it's in our factories. We talk about bringing manufacturing back—reindustrializing America and reducing our reliance on global supply chains. But talk isn't strategy. And neither are tariffs. Yes, deploying them can help U.S. manufacturers compete against the unfair, subsidized trade practices of other countries. But, with or without tariffs, we need to build factories, train workers, and encourage and deploy automation here in the U.S. That will take long-term investment, smart industrial policy, and institutions built to do this work. The Shrunken Manufacturing Sector American manufacturing remains a world juggernaut, number two in worldwide production—but we've hollowed out key capacity and we're struggling to rebuild with what's left. As U.S. manufacturing contracted from 25% of GDP in the 1950s to just 10% today, entire capabilities and supply chains disappeared. While some of that contraction is due to automation, between 1984 and 2018, the U.S. also lost 1,600 foundries and more than 4,400 metal casting facilities, most of that capacity moving to China. These aren't obscure components: cast and forged parts are essential to aircraft, infrastructure, energy systems, and defense. And it wasn't just metal—we pulled back from critical sectors like semiconductors, electronics, and pharmaceuticals, where pandemic-era shortages exposed just how vulnerable we'd become. Burdensome regulations, high taxes, labor costs, and poor trade policies have driven manufacturing overseas and drained some U. S. of manufacturing capabilities essential for our national security in a predatory global economy. Today, most U.S. manufacturers are small and undercapitalized—struggling to modernize operations, reconnect supply chains, and replace aging infrastructure. And we're running out of workers. By 2030, we'll be short more than 2 million manufacturing employees nationally. It's time we focus on U. S. manufacturing growth and technology—and fix global trade imbalances by rethinking the policies and problems that got us here. We aren't talking about plug-and-play reshoring. We're talking about a generational overhaul that will require real strategy and sustained investment to push the use of technology, drive the training of a needed workforce, fill abandoned and under-utilized U. S. plants, and build new ones. It's time to create a next-generation manufacturing Moves To Drive Our Next-Generation Manufacturing Economy Rhetoric won't rebuild capacity. But here are the kinds of decisive moves that could be the backbone of a truly bold industrial policy: 1. A Tariff to Technology Fund Turn tariff revenue into rocket fuel for innovation. A fixed percentage of every dollar brought in via tariffs should go directly to the small manufacturers they're meant to protect—funding robotics, AI, advanced equipment, and digital upskilling. Germany's Mittelstand model offers a blueprint, providing targeted funding, technical support, and long-term workforce development for small manufacturers. That's how Germany maintains a trade surplus and leads Europe in industrial automation. We should follow suit. 2. Rapid-Approval Manufacturing Zones Red tape kills momentum. Let's create 'Manufacturing Innovation Zones', with an emphasis on economically challenged communities. By fast-tracking permits in these areas, U. S. supply chains can flourish, and projects can go from blueprint to breaking ground in 90 days or less. When Austin and Phoenix cleared the way for semiconductor expansion, billions in private investment followed. That's a powerful model to replicate everywhere. 3. A National "Second Chance" Hiring Initiative Manufacturing urgently needs workers. The 600,000 people who leave the U.S. prison system each year need second chances. We should offer tax credits and training support to manufacturers that hire returning citizens. We should also provide 'negligent hiring and negligent supervision' tort waivers for manufacturing companies that hire ex-offenders, easing legal concerns. In Cleveland, my nonprofit MAGNET (an MEP Center) has helped hundreds of individuals move from incarceration to manufacturing careers—with very low recidivism. That's not just good economic development—it's smart public safety and fiscal responsibility. 4. A Manufacturing Renaissance Prize America thrives on competition. Let's launch a national prize for communities and companies to innovate extraordinary new business models and technology that enables reshoring and job creation. It's worked before. DARPA's Grand Challenges transformed autonomous vehicle development. XPRIZE catalyzed private space flight. A Manufacturing Renaissance Prize would turn breakthrough ideas into blueprints for industrial revival nationwide. With some imagination, this could become a Manhattan Project 2.0 where the country's best minds are rallied to solve the most pressing, world-changing Infrastructure To Deliver Dynamic Manufacturing Change Here's the good news: We already have the infrastructure to deliver on these big ideas. The Manufacturing Extension Partnership (MEP) is built for this moment, possessing the technical expertise and proven ROI needed to execute a new American industrial policy. It's the only national program dedicated to helping small and midsized manufacturers automate, innovate, and reshore production. After all, three out of four manufacturers in this country have less than 20 employees on the payroll. Yet earlier this year, the federal government tried to cut the program, telling lawmakers it no longer aligns with priorities. Future funding for MEP is still to be determined, but the timing couldn't be worse—now is the time to invest more in foundational programs that facilitate manufacturing growth, not less. If we're serious about rebuilding American manufacturing, we need a strong MEP network and further investments in programs like it. From Moonshots to Machinists: America's Next Great Leap Winning the future of manufacturing isn't about nostalgia. It's about courage. The courage to invest when it's hard. To retrain, retool, and reimagine what American industry can be. Tariffs won't do it alone. Neither will tax breaks. What we need is willpower—and a national commitment like the one that put footprints on the moon. Now is the time to reach deeper—into our communities, our capabilities, and our conviction to build what's next—for manufacturing and for America.
Reuters
10-06-2025
- Business
- Reuters
Investment glass seems half full near mid-point of 2025
LONDON, June 10 (Reuters) - A consequence of U.S. President Donald Trump's global economic upheaval seems to be greater "home bias" in investing - going some way toward explaining the year's relative performance while seeming chaos sows stimulus around the world. Many of the half-year appraisals of Trump's often erratic trade and economic agenda attempt to cut through policy noise to suggest where the world will ultimately pan out. Larry Fink, boss of BlackRock, the world's largest asset manager, opined last week about a "second draft of globalization", one positioned somewhere between the rejected inequities of unfettered global trade and capital and another alternative of stifling economic nationalism and capital curbs. The new middle ground can still enjoy open markets, Fink reckons, but they will likely be steered, prodded and tempted home to ensure household savings first benefit the country of those doing the saving. "People will fuel their country's economic growth and own a piece of it," Fink argued in an op-ed in the Financial Times. For Fink, this "re-globalization" aims "not just to generate prosperity but to aim it towards the people and places left behind the first time." Trump's attempted re-industrialization of America is a version of this idea. Using trade barriers, bilateralism, carrots and sticks, he seeks to kick-start U.S. manufacturing while accepting that lower trade deficits will also see lower overseas investment flows to U.S. markets and smaller government to boot. The political pitch is to create more well-paid factory jobs instead of super-wealthy asset owners. Easier said than done. But whatever one thinks about Trump's "America First" strategy, that formula seems to be working best overseas. Germany's dramatic fiscal reboot this year, which was catalyzed by both Trumpism and far-right populism at home, also speaks to the new globalization theme. Europe at large now appears to be prioritizing investment in its own industrial base, security, digital infrastructure and green technologies - hoping to unleash both under-utilized savings at home and attract capital from Wall Street. Britain is apeing these industrial and defence policy trends, while Japan is attempting to unlock its domestic pension savings too. Meanwhile, Chinese fiscal stimulus has also risen. So while trade war jitters abound, it sets up potentially synched fiscal boosts next year. TS Lombard's Rory Green and Alexandros Xenofontos pointed out on Monday there could be strong fiscal stimuli in Europe, China and possibly the U.S. in 2026 - a trifecta that's only happened twice in 30 years, in response to the COVID-19 pandemic in 2020 and the 2007-2008 global financial crisis. That possibility goes some way to explain why, despite all the market volatility and hype surrounding a U.S. cyclical slowdown, global stock markets are once again hitting record highs. It also explains why it's been a bad year for global sovereign bonds and the U.S. dollar - as stimulus requires more borrowing and foreign investors shed overweight U.S. holdings. Even though Wall Street stocks (.SPX), opens new tab are just about positive for the year, they are underperforming the likes of equity indexes in Germany (.GDAXI), opens new tab and Hong Kong (.HIS), opens new tab by 25%-40%. If even some of the estimated $7 trillion of European money that flowed into U.S. equities over the past dozen years were to be repatriated, markets would price such a move very quickly. And despite all the concern about the U.S. economic and political direction, American money is not rushing offshore. Mutual fund data shows net U.S. flows to global equity funds remain negative through this year. In fact, they're at their most negative in more than two years. Cash flowing to U.S. money market funds, meantime, has climbed back above $7 trillion again in the latest week, near the record high set in April. Does that data mean the ultimate outcome of Trump turning the world upside down could actually be positive? In an article for the Council on Foreign Relations' Foreign Affairs magazine titled"Tell Me How This Trade War Ends,", opens new tab Emily Kilcrease and Geoffrey Gertz reckon that despite all the Trump chaos, there is a "kernel of truth" in his insistence that the world trade system needs a re-set. They conclude there is no going back to a world where the U.S. championed ever freer trade. Neither is it inevitable that the world will retreat into outright protectionism, as long as Trump pushes other U.S. allies into a new, less-lopsided trading framework. "Trump's shock to the system may not be pretty. But it could open the way for a much better system," Kilcrease and Gertz wrote. "Trump has turned the United States into a revisionist power seeking to shatter what remains of the economic order. Thus far, his approach has been needlessly chaotic," they said. "But there is still an opportunity to wrest a positive outcome from the current tumult." At nearly the mid-point of the year, investors seem tempted by this "glass half full" view of 2025's disruption. The optimists are trying to see through the inevitable twists and turns ahead to focus on the possibility of a new, more positive equilibrium down the line. In truth, much remains murky and unknowable at this point. The opinions expressed here are those of the author, a columnist for Reuters.
Yahoo
10-05-2025
- Business
- Yahoo
Trump's ‘Manufacturing Renaissance' Is Even Harder With Tariffs
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. Is Trump's Plan to Reopen the Notorious Alcatraz Prison Realistic? As Trump Reshapes Housing Policy, Renters Face Rollback of Rights Vail to Borrow Muni Debt to Ease Ski Resort Town Housing Crunch NYC Warns of 17% Drop in Foreign Tourists Due to Trump Policies What's Behind the Rise in Serious Injuries on New York City's Streets? US President Donald Trump says his tariffs will spark a 'manufacturing renaissance.' But the duties themselves are making that already monumental task even more challenging. In order to build and expand factories, companies need machinery and raw materials — many of which are typically imported and now subject to a variety of punitive tariffs. That compounds a host of pre-existing obstacles to realizing Trump's vow to re-industrialize America, which has lost 6.8 million manufacturing jobs since 1979 as production has moved to cheaper countries and automation has increased. Labor shortages, a costlier workforce, global supply chains: the Covid pandemic put a spotlight on the massive challenges of reshoring factories. Now Trump's chaotic overhaul of trade policy has added a layer of uncertainty to producers who need some degree of assurance on tariffs — how elevated they'll stay and for how long — before making long-term investments. 'The obstacles are huge,' said Gordon Hanson, a professor at the Harvard Kennedy School and one of the authors of a paper that coined the term 'China shock' for the loss of US manufacturing from imports of cheaper goods. 'My gut tells me it's not going to happen.' Nora Orozco wants to open a Texas factory with 200 new jobs for her footwear company Evolutions Brands and eventually move production from Mexico there. But those plans are on hold because she needs to buy equipment that only comes from China, and Trump's tariffs have more than doubled the cost. 'I like the idea of onshoring, but this makes it impossible for us,' said Orozco, who, along with many other executives, have filed over 1,100 individual requests for tariff exclusions for Chinese-made machinery. More than half of the US's imported goods are inputs for manufacturing, according to the National Association of Manufacturers. Both Democratic and Republican presidents have tried to revitalize US manufacturing that reached its peak employment in 1979, but it's now only 8% of the workforce. The industry had nearly half a million vacancies in March, the latest data available from the Bureau of Labor Statistics, and a 2024 Deloitte analysis showed 1.9 million manufacturing jobs could go unfilled in the next decade. The White House points to studies that concluded Trump's first-term tariffs created thousands of jobs. But other research from the Federal Reserve shows Trump's tariffs cost more manufacturing jobs than they added due to rising input costs and retaliatory tariffs. Also in Trump's first term, more than 231,000 jobs were affected by companies shifting work overseas, based on petitions for federal Trade Adjustment Assistance that helped workers who lost jobs or hours to off-shoring production. More than half were in manufacturing, and the total number was higher than in Barack Obama's final term. The Trump administration has touted announcements of companies investing in the US, including a $500 billion pledge from Apple Inc. But many of those announcements were tentative or had already been in the works. Companies that would be in a position to move production say they are holding off because they don't know whether tariffs are permanent or just leverage to negotiate trade deals. Manufacturers also cite the higher costs of labor and complying with regulations in the US as well as a lack of adequate infrastructure as reasons that discourage re-shoring. Tax cuts and deregulation in Trump's first term spurred a surge in announcements for domestic factory jobs, but those fell off with his first trade war, according to data compiled by the Reshoring Initiative, a nonprofit that advocates for returning manufacturing to the US. When it comes to assessing how long it would take to bring those jobs back home, it's important to differentiate between building big factories from the ground up and manufacturers who could quickly increase production at existing plants that are operating at less than full capacity, said Harry Moser, the group's founder. 'The big assembly plants, that's where you're going to take years, and the uncertainty will cause that not to be happening until the companies believe everything's stabilized and they know what the rules are going to be,' Moser said. The US is never going to return to a time like in the 1950s when low-skill manufacturing jobs were plentiful and a third of the entire workforce was involved in manufacturing, said Jay Bryson, chief economist for Wells Fargo & Co. 'Will manufacturing facilities move back to the United States? Undoubtedly they will,' Bryson said on an April 10 webinar. 'But make no mistake, we're not going back to 1955.' --With assistance from Marie Monteleone. US Border Towns Are Being Ravaged by Canada's Furious Boycott Maybe AI Slop Is Killing the Internet, After All Pre-Tariff Car Buying Frenzy Leaves Americans With a Big Debt Problem What the US Would Lose If Trump Pushes Out Legal Immigrants Inside the Dizzying Chaos of Running a Freight Business Under Trump ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
09-05-2025
- Business
- Bloomberg
Trump's ‘Manufacturing Renaissance' Is Even Harder With Tariffs
US President Donald Trump says his tariffs will spark a 'manufacturing renaissance.' But the duties themselves are making that already monumental task even more challenging. In order to build and expand factories, companies need machinery and raw materials — many of which are typically imported and now subject to a variety of punitive tariffs. That compounds a host of pre-existing obstacles to realizing Trump's vow to re-industrialize America, which has lost 6.8 million manufacturing jobs since 1979 as production has moved to cheaper countries and automation has increased.
