Made in the USA

All my life pretty much everything has been made in China. Everything from technology to clothes, from silverware even to American flags. They are all stamped made in China. Well there is a chance that's about to change. Due to several reasons we're about to look at, there is an ever increasing chance that industry is going to make a big comeback in the United States. That will be good for us for a lot of reasons. There are currently several reasons for why this is going to happen, and they are: The rising cost of transportation and manufacturing costs in China and other "cheap" countries, the resurgence of the American economy, changing tax policies, and energy costs.




The rising cost of transportation and manufacturing costs in China and other "cheap" countries:
This is definitely the longest header I've ever had, but it is the most condensed way to state a complex reason. There are a lot of things that are changing this up. Back in the 70's and 80's when manufacturing started to trend towards these countries the world was a different place. Oil was extremely cheap, and in industries driven mostly by manual labor these countries had lots of it for cheap. The US Dollar was the most powerful currency in the world, and China's (as well as other manufacturing countries) was quite weak by comparison. US companies could save as much as 50% in costs by moving to one of these countries. Fast forward to the present day, and this isn't quite the case. Economic recession in America combined with the huge surge of labor moved to these countries has pushed the dollar down and competing currencies up. That makes the cost of labor and materials used for manufacturing a lot more higher, and companies now only see between 10% and 20% cost savings in manufacturing. That might be enough, but the cost of transportation has skyrocketed as well. With the price of oil up a minimum of 5 times the price of it's low in the 80', that winds up cutting cost savings down even more, to an average maximum of 5%. While still a savings, that is not enough when having to consider the US (as well as many European Countries) import/export laws and taxes. So while companies are by no means losing money, they aren't making it hand over fist like they used to.

The resurgence of the American economy:
While the US economy still has a ways to go, it is clearly inching its way back up. This has a number of contributing factors itself, but overall that means people have more money to spend on things. This is coupled with a growing number of start up companies that took advantage of the recession to open businesses and/or manufacturing plants when property was cheap. While not directly related to the economy in the same way, the US has the most specialized labor force as well. This is due in part to the recession pushing people without jobs to go back to school. That in turn puts plenty of folks in a position to be a very useful worker in a modern day factory with more robots than people on the shop floor.

Changing tax policies:
This works both ways. In the United States, the states themselves are taking the lack of manufacturing into their own hands. States have been competing for the last few years offering incentives, tariff/tax cuts, and other benefits to companies so that they would bring manufacturing back home. On the Federal level there has been a lot of talks about lowering tax rates, lowering export tax, and raising import tax. While this sort of thing is pretty hard to push through, even the talk of it has got companies thinking about moving back here.

Now if you go across the ocean to China and other manufacturing countries they are doing the opposite. They are raising export taxes, taking away incentives, lowering import taxes, and tightening import regulations. Probably in an the attempt to make more money from the its huge manufacturing sector, but in doing so they are helping to make manufacturing in the US better looking all the time.

Energy costs:
While this is in a similar realm as transportation cost, it is separate enough that it deserves its own mention. Outside of the rising cost of oil, other energy sources are costing more all the time overseas. As these once "developing" countries have become developed, their standard of living (and alongside it energy needs) have increased. The increased demand drives the price up on its own, as well as the increase in cost of fossil fuels. Back at home, Fracking is set to provide a solid boost to domestic oil production cutting down on the cost of domestic energy (fracking itself is a complex and convoluted industry. In now way am I blatantly giving it a free pass). Plus, the US has the most "Clean Energy" programs in the world, and so alternative energy sources are abundant here. Some are even less expensive than fossil fuel, due to government subsidies, or their local abundance.

Conclusion:
While nothing is a safe bet in this world, it really is looking like the US is going to get a lot of it's manufacturing sector back in the next 10 years or so. That's very good for us in more ways than one. It will speed up the rebuilding of our economy, provide higher quality goods (potentially at lower costs), and will help to keep driving innovation in manufacturing technology and clean energy. All of which are good for the world, because whether or not you like America, we are the largest driving force in the world economy, political climate, technological innovation, and environmental health.