By Harry Moser
S
ince 2010, companies have brought over 700,000 manufacturing jobs to the U.S., the sum of reshoring by U.S. companies and FDI (foreign direct investment) by foreign companies. This surge is responsible for about half of the 1.4 million manufacturing employment increase from the March 2009 Great Recession valley to the December 2019 pre-COVID-19 peak. At a given level of U.S. goods consumption, the only ways to increase manufacturing are to export more or import less, i.e., reshore/FDI. Importing less is far easier due to the economic advantages of selling locally. Balancing the goods trade deficit will increase U.S. manufacturing by 40 percent, or 5 million jobs, President Joe Biden’s goal. Reaching this goal in even 20 years will require increasing the rate of annual reshoring/FDI from the Obama and Trump averages of 56,000 and 144,000, respectively, to about 450,000. President Biden’s humanitarian and ecological goals will all be much more affordable if this rate of reshoring occurs. The purpose of this article is to learn from the Trump experience and offer guidance to President Biden.
Trump in Review ©iStockphoto.com/mj0007
Biden Versus Trump on Reshoring: A Review, and a Critique
President Trump started strong on reshoring. The number of reshoring and FDI jobs announced coming to the U.S. surged from 75,000 in 2015 to 115,000 in 2016 and 193,000 in 2017. Major driving factors included reductions in corporate tax rates and regulations, and a generally business-friendly environment. The annual rate then fell off to 154,000 in 2018 and 117,000 in 2019, driven by business uncertainty over the unpredictability of tariffs and other trade war actions. Reshoring picked up in 2020 because of COVID-19, with many PPE investments and increased corporate understanding of risk mitigation through shorter supply chains. President Trump’s haranguing companies to reshore or not offshore did not
SPRINGS / Spring 2021 / 39
