Reshoring, Risk, and U.S. Manufacturing in an Uncertain World
It is almost June as I write this column, and we are rapidly approaching the mid-point of 2026. In the United States, July 2026 will also mark 250 years as a nation, an event that I am sure will include staples like hot dog roasts and fireworks, and a few less traditional celebrations, like a Grand Prix race circling the National Mall.
For the July celebrations, hot dogs and fireworks offer a familiar comfort amid the change and uncertainty we have experienced over the last few years. Since the onset of the Covid Pandemic, the global economy has faced many disruptions, from geopolitical conflicts, shipping accidents, and of course global healthcare disruptions, that have made industry leaders rethink risks involved with global trade and manufacturing. The result has been more discussions around reshoring and near-shoring, with some U.S. manufacturers committing to shifting their operations.
Last year, GE Appliances announced plans to shift production of clothes washers from China to a manufacturing facility in Kentucky. The $490 million investment is expected to create 800 new jobs in the area. In an AP story reporting the decision, CEO Kevin Nolan was quoted as saying, “We are bringing laundry production to our global headquarters in Louisville because manufacturing in the U.S. is fundamental to our ‘zero-distance’ business strategy to make appliances as close as possible to our customers and consumers. This decision is our most recent product reshoring and aligns with the current economic and policy environment.”
In a press release earlier this year, Apple announced that the Mac mini will be made in a new facility in Houston. The company is also expanding advanced AI server manufacturing at the Houston factory. According to Apple, the expansion of its Houston operations will create thousands of jobs. “Apple is deeply committed to the future of American manufacturing, and we’re proud to significantly expand our footprint in Houston with the production of Mac mini starting later this year,” said CEO Tim Cook. In 2025, the company announced a $600 billion commitment to the United States with its American Manufacturing Program. Since February, the company has sourced more than 20 billion U.S.-made chips from 24 factories across 12 states. The company’s partner, GlobalWafers, has started production of its new $4 billion bare silicon wafer facility in Texas, and another partner, Corning, has its Harrodsburg, Kentucky, facility now 100% dedicated to cover glass for iPhone and Apple Watches.
As we face the vulnerabilities caused by an unstable geopolitical environment, the costs for restructuring U.S. manufacturing are large. A new study by global consulting firm McKinsey estimates that it would take $2 trillion, or about 6% of U.S. GDP, to create the industrial capacity needed to replace imports of key strategic goods. In an article about the report, Axios explained that that number is the equivalent two years of the U.S. annual defense budget and that it excludes the resources needed to develop infrastructure, train a skilled workforce, and provide energy needed for the projects. The McKinsey study identifies what it calls “Achilles heels” imported manufactured goods, which are important due to dependencies that include “some combination of criticality to national security, supply concentration, and geopolitical distance from trade partners.” According to McKinsey, about 25% of imported goods coming into the United States are considered "Achilles heels," and about 5% of imports, mainly comprised of computers and electronic products, include all three of the dependencies that identify an "Achilles heel" product. The study emphasized that addressing key vulnerabilities will require a transformed industrial base, which includes the $2 trillion price tag I mentioned earlier.
The response to vulnerabilities identified in the McKinsey study seems like a daunting task, but it is encouraging to know that a trend in this direction has already begun. Additionally, the information in the study points to many opportunities for adhesives and sealants manufacturers to step in and become an integral part of this important trend as the U.S. celebrates 250 years.
Thanks for reading this issue of ASI. As always, please contact me at parkerk@bnpmedia.com with your comments and questions.
