Paving the way for US reshoring
Are we about to see a US reshoring renaissance? We have seen a supply-chain crisis roil economies across the planet, a growing risk of US decoupling with China, the emergence of the Russia/Ukraine conflict and wider security concerns over Taiwan. We also have a massive US infrastructure law that could lead to the spending of billions of dollars on US bridges, tunnels and other infrastructure.
Against this backdrop, both major US political parties seem to want to bring jobs back to the economy, but will these jobs come back from offshored facilities and if so how will they be funded? The original push to offshoring by US businesses was about immediate cost reductions while the risks inherent in offshoring were worthwhile.
Now - with all the political and supply cost issues facing economies - the risk equation is changing and a variety of macroeconomic drivers could serve as a collective catalyst for a potential deglobalisation of US business and even a reshoring and nearshoring boom.
Raphael J. Lewis and Jack Encarnacao, research analysts, Newton
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MARK-278864-2022-06-15