According to Bloomberg, U.S. firms are now taking back production lines to the U.S.  

It was commonly thought among executives that production would return to normal when the pandemic ended. However, the data shows the opposite. 

China has long been a manufacturing hub for multinationals. But due to the effect of the recent Covid lockdown policies, CEOs are speeding up their plan to relocate production back to the U.S. 

Bloomberg shows data backing the U.S. reshoring move. New manufacturing facilities construction in the U.S. has jumped 116% over the past year.

Among those, big-scale factories in semiconductors or aluminum and steel top the list. Intel and Taiwan Semiconductor Manufacturing are building massive chip factories in Phoenix, Arizona. In the south, aluminum and steel plants are under construction: Novelis in Bay Minette, Alabama; U.S. Steel in Osceola, Arkansas; Nucor in Brandenburg, Kentucky.

According to Bloomberg, Richard Branch, chief economist at Dodge, noted that many smaller companies are taking similar actions. But not all of them are indeed offshoring. Some just want to expand capacity. They re-evaluate their supply chains, parts shortages, and soaring transportation costs.

Bloomberg cited a survey of senior executives from UBS in January, showing the shifting trend. Over 90% of them responded that they are now moving production out of China or plan to do so. About 80% of respondents said they considered moving some of their production lines back to the U.S.

The trend has not just started from Beijing’s strict Covid lockdown measures; it began with President Trump. Considering China as the U.S.’s key adversary, Mr. Trump launched multiple attacks on many fronts during his term to protect the domestic market; from restricting China firms to access U.S. technologies to imposing strong tariffs on its imported products. Experts call it the Trump effect.

Experts also name a number of reasons for U.S. firms to relocate their business production from China. Among them are moral and environmental concerns, regional localism, automation in the manufacturing sector, diversification, and others. 

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