reShoring in Name Only

In a recent Kearney ReShoring Index report, the consulting firm suggests a reframing of how we measure the success of ReShoring. The authors ask; "But what if that ecosystem of suppliers that China and other Asian countries have been building for the past three decades were to move closer to the US? That's exactly what we're starting to see happening in this year's edition of the Kearney Reshoring Index because, for a variety of reasons, more and more Chinese and Asian companies are setting up manufacturing operations in Mexico."

This “ReShoring” of Asian manufacturers to North, Central, and South America raises some concerning questions about Chinese influence in Americas backyard. Although US manufacturers should benefit from shortened lead times and less frequent supply chain delays due to weather and global pandemics, the US government should be weary of the potential formation of a western version of the Chinese Belt and Road initiative. It is increasing important that the United States does not forfeit its influence over its neighbors to far away nations such as China. If our neighbor’s manufacturing facilities are dominated by our greatest adversary, there is no telling what kind of supply chain disruptions might emerge in the event of war.