Globalisation & Trade: Reshoring
Why the World's Factories Are Packing Up and Coming Home
The era of making things as cheaply as possible, wherever on earth that happened to be, is ending — and the bill for unwinding it is bigger than most governments want to admit.
The Idea
For roughly four decades, the logic of global manufacturing was irresistible: design it here, make it there, sell it everywhere. Wages were lower abroad, shipping was cheap, and trade agreements smoothed the friction. Corporations didn't just outsource production — they outsourced entire supply chains, sometimes entire industries. It looked like pure efficiency. It turned out to be fragile. Reshoring is the reversal: bringing manufacturing capacity back to the country where the company is headquartered, or at least closer to it. The neighbouring-country version is called 'nearshoring'; the trusted-allies version is 'friendshoring'. All three are accelerating, driven by a collision of crises — the pandemic exposed how a single factory shutdown in one region could empty hospital shelves on another continent; the war in Ukraine demonstrated that geopolitical shocks travel instantly through integrated supply chains; and rising tensions between major economies have made decades-long outsourcing arrangements feel politically precarious. But here's the part that gets underreported: reshoring is not simply a reversal of offshoring. The factories coming back are not the ones that left. A semiconductor plant built today is almost entirely automated. A returned pharmaceutical facility employs a fraction of the workers its predecessor did in the 1980s. So reshoring creates strategic resilience and genuine geopolitical leverage — but it doesn't straightforwardly recreate jobs, communities, or the economic muscle memory that was lost. The geography of production is shifting, but the gains are distributed very differently than the political promises tend to suggest.
In the World
In August 2022, the United States passed the CHIPS and Science Act, committing an enormous sum in subsidies to lure semiconductor manufacturing back onto American soil. The headline beneficiary was Taiwan Semiconductor Manufacturing Company — TSMC — the single most strategically important factory operator on earth. TSMC makes the chips inside almost every high-end device globally, and it does so from a small island sitting in one of the world's most contested straits. TSMC agreed to build in Arizona. The announcement was celebrated as a triumph of industrial policy. Then reality arrived. Construction fell behind schedule. TSMC's executives publicly cited a shortage of skilled tradespeople in the US — the specialised workforce to build and run a cutting-edge fab simply didn't exist in sufficient numbers. At one point, TSMC flew in hundreds of experienced engineers from Taiwan just to keep the project moving. The opening of the first Arizona plant was pushed back by years. This is reshoring in practice: enormously expensive, technically demanding, slower than the political cycle that demanded it, and dependent on rebuilding institutional knowledge that took generations to accumulate elsewhere. The Arizona TSMC plant will eventually produce chips. It will be a genuine strategic asset. But it illustrates why reshoring is less a switch being flipped than a decades-long reconstruction project — one where the gap between the announcement and the reality is measured not in months, but in industrial generations.
Why It Matters
Most people experience globalisation as consumers — through prices. Reshoring, at its core, is a decision to accept higher costs in exchange for resilience, security, or political control. That trade-off will eventually show up in what things cost, and in which industries your country decides are too important to leave to market logic alone. If you work in manufacturing, logistics, or any sector adjacent to physical goods, the geography of where things are made is becoming newly contested — and that creates both disruption and opportunity depending on where you sit. If you invest, the companies best positioned to benefit from reshoring trends are not always the obvious ones: think industrial real estate, energy infrastructure, and workforce training rather than simply the manufacturers themselves. More broadly, reshoring asks a question that pure market economics struggles to answer: what is strategic capacity worth? How much extra cost is a reasonable price for not being held hostage to another country's political decisions? Those are not just policy questions. They shape the economic landscape you navigate every day — the prices you pay, the sectors that grow, and where the next generation of decent-paying work actually appears.
A Question to Ponder
If resilience and efficiency are genuinely in tension, who should decide which one wins — markets, governments, or some negotiation between the two?
Get a new one of these every morning.
Start learning with Thinkable