All thesesPattern Lab
activev1.8 · 67 signals

Reshoring & Deglobalization

Manufacturing returning home, supply chain rewiring, and what happens when 'made in America' becomes strategic necessity rather than marketing.

Reshoring & Deglobalization

The Core Argument

The 40-year experiment in global supply chain optimization is ending. What started as pandemic-driven awareness has become bipartisan policy consensus: critical manufacturing must come home.

This isn't protectionism dressed up in new language. It's a fundamental repricing of risk. The calculus that made it "efficient" to source from the lowest-cost producer assumed stable geopolitics, reliable shipping, and abundant energy. None of those assumptions hold anymore.

Key Claim: 30% of China-dependent supply chains will have US or allied-nation alternatives by 2028.

Why Now?

Three forces converging simultaneously:

1. Geopolitical reality — The US-China relationship has fundamentally shifted. Taiwan risk alone is forcing companies to rethink semiconductor dependencies.

2. Policy support — CHIPS Act, IRA, and bipartisan reshoring incentives create financial tailwinds for domestic production.

3. Automation economics — Robotics and AI narrow the labor cost gap. When labor is 10% of cost instead of 40%, proximity to customers matters more.

What This Means for Investors

The obvious plays (construction, industrial automation) are already priced. The second-order effects are not:

  • Professional services demand — New factories need accountants, lawyers, HR consultants who understand manufacturing
  • Regional banking — Manufacturing belt banks will finance the buildout
  • Workforce housing — Factory towns need homes, and workers need services
  • Energy infrastructure — Manufacturing is energy-intensive; grid buildout follows

What I'm Watching

1. Factory announcement velocity — Are new announcements accelerating or plateauing?

2. Supply chain cost data — Is domestic production actually more expensive, or is the gap narrowing?

3. Skilled labor constraints — Are workforce bottlenecks slowing the buildout?

The Connection to Other Theses

Reshoring intersects with nearly every other thesis I track:

  • Inflation — Domestic production costs more in the short term, contributing to structural inflation
  • AI & Knowledge Work — Professional services demand from reshoring benefits AI-native firms
  • Demographics — Aging workforce constrains manufacturing labor availability