I’m sure with all those new tariffs, Trump is ready to put shovel to dirt on all those new U.S. factories right now! 😉
Want to Bring Factories Back? This Is What It Takes.
By Erin McLaughlin, Barrons - April 2, 2025
https://www.barrons.com/articles/trump-tariffs-manufacturing-onshoring-obstacles-a36686cb
As the global trade war escalates, many companies are taking a hard look at bringing manufacturing to the U.S. Onshoring can yield benefits for the overall economy. Manufacturing locally creates jobs and makes supply chains less risky. Shorter shipping routes have environmental advantages.
However, the process of onshoring production is far more complex and time-consuming than policymakers and the public may realize. Companies moving manufacturing to the U.S. will likely face a long and bumpy road—one that could involve supply chain disruptions and higher inflation.
As companies weigh the risks and benefits, they will want to consider four hard truths that could make onshoring a challenge.
Onshoring will take years
From soup to nuts, the process of shifting manufacturing into the U.S. takes three to 10 years in most cases. That is much longer than the assembly plants of yesteryear. Modern advanced manufacturing facilities often involve intricate machinery, such as robotics, guiding specialized processes. A biopharmaceutical plant requires five to 10 years, according to estimates by the Pharmaceutical Research and Manufacturers of America, a trade group for the industry.
Long schedules and complex buildings come with many risks. Building a new manufacturing facility involves a dizzying set of steps, including programming, site selection, and acquisition, followed by architecture, engineering, and construction team selection. Additional delays can come into play during the design phase, with the need for state and local permitting and environmental reviews. Once the factory is constructed, firms must install equipment and undergo quality and certification inspections.
But even then, companies can’t breathe a sigh of relief, as it can take even longer to onshore an entire manufacturing network. Manufacturers depend on supply chains involving upstream and downstream materials sourced from other companies, and new procurement of these inputs from localized suppliers takes time.
Onshoring will require quality infrastructure
Large-scale, advanced manufacturing requires stable electric grids, available water, redundant data and telecommunications networks, and efficient transportation corridors that can handle increased freight and supply chain volumes. U.S. infrastructure is subpar on all those fronts.
The American Society of Civil Engineers gave U.S. infrastructure a C in its 2025 report card —sadly, that is the nation’s highest score ever. And the civil engineers gave some key infrastructure subcategories poorer grades: Aviation, dams, energy, levees, roads, schools, and wastewater each received a D+.
The U.S. passed an infrastructure law in 2021 aimed at fixing some of these problems. Recent investments are strengthening U.S. roads and bridges, but transportation funding is under threat as the new administration seeks to cut federal spending.
Onshoring will need qualified labor
Shifting demographics are also a cause for concern. The U.S. population is aging, while the birthrate is falling. Those issues are combining with stricter policies around foreign-born workers to contribute to persistent labor shortages in key industries. At its outset, a reshoring renaissance may spur a surge in construction—a labor-intensive industry that has been slow to leverage technology. And more than a quarter of the U.S. construction labor force is made up of immigrants —a labor pool that is likely to shrink.
Once factories are built, they will need new skilled workers. These employees will command higher salaries than overseas labor. There will also likely be a short-term skills gap for workers experienced in automation, robotics, and data analytics. The manufacturing sector’s skills and employment gap could result in 1.9 million unfilled positions by 2033.
Onshoring will raise costs
Elevated interest rates and the high cost of construction materials will compound the overall costs of onshoring. Retrofitting and building new manufacturing facilities, along with purchasing equipment and investing in technology, takes substantial capital investment—usually planned years in advance.
Material costs run the gamut, from the steel in a new building’s frame to critical minerals in electronics and robotics. Stoking uncertainty is a perfect storm of rising prices from new tariffs, stronger export controls, and a changing economic landscape. On top of all of that, the cost of property insurance has soared in recent years.
A U.S. manufacturing renaissance would have short- and long-term benefits, including creating jobs in construction and advanced manufacturing that pay higher than many positions in the services sector. However, onshoring—especially when attempted at a breakneck speed—creates many challenges and will contribute to higher business and consumer prices. Better targeted economic and industrial policies, as well as support for a larger, more prepared labor force, may mitigate these risks.