Can Biden bring manufacturing back to the U.S.?

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Shawmut Advanced Materials

COVID exposed global supply-chain flaws. Can Biden bring manufacturing back to the U.S.?

Nearly 5 million net manufacturing jobs have disappeared since 1997, according to the Economic Policy Institute—roughly one out of every four. Though automation has played a dominant role in those job losses, critics also blame free-trade policies such as the 1993 North American Free Trade Agreement. The decline of American manufacturing jobs has helped shrink the middle class and worsen U.S. income inequality. Political scientists, moreover, have found strong links between the loss of those good jobs and the rise of political extremism in the U.S.

On top of those long-term trends, COVID-19 has highlighted the fragility of the global supply chains that define 21st-century manufacturing. The Biden administration is signaling broader structural reforms aimed at both reducing those supply-chain risks and slowing or reversing manufacturing job losses longer-term, a process known as "reshoring," by making manufacturing in the U.S. more attractive.

But what will it take to make this a reality? Huge federal pandemic spending has given some companies their first bit of runway to return medical manufacturing to the U.S., but long-term reshoring success will likely depend on serious reform to U.S. national trade and industrial policies. The good news is that if such efforts succeed, they will create more than just manufacturing jobs.