While tariffs create a clear incentive to bring manufacturing back to the U.S., this is far from an easy task. Building up the kind of manufacturing capacity the U.S. once had will take decades, as it did in China. This week, we’ll examine why it is so difficult to reverse a trend that dates back to the breakup of RCA in the 1940s — marking manufacturing as a low government priority — an issue that can’t be fixed in a few years. We’ll close with my Product of the Week, a hydrogen-powered horse robot (in prototype form) from Kawasaki named Corleo that should be far better than a motorcycle if it makes it to market. Reshoring US Manufacturing Is Difficult The call to “bring manufacturing back” resonates deeply in the American psyche, fueled by nostalgia for a perceived golden era, concerns about national security, and anxieties over global supply chain vulnerabilities. Electronics manufacturing, which encompasses everything from intricate semiconductors to consumer gadgets, is at the heart of this discussion. Yet, despite the political rhetoric and popular support, reshoring complex electronics manufacturing to the U.S. borders on impossible in the near term. The reasons are multifaceted and deeply entrenched, stemming from decades of global economic shifts, strategic investments by competitors, and fundamental differences in infrastructure, workforce, and policy environments. Why China Still Leads Electronics Manufacturing China methodically built itself into the world’s workshop for decades, particularly for electronics. This dominance wasn’t accidental; it resulted from strategic planning and the cultivation of several key advantages that the U.S. currently cannot match. Labor Dynamics and Scale While often cited, the simple “cheap labor” argument is now oversimplified, though it was the initial catalyst. Chinese labor costs have risen significantly. However, the sheer scale of the available workforce, coupled with decades of experience, specifically in electronics assembly and production processes, creates efficiency and flexibility that is difficult to replicate. More importantly, this vast labor pool allowed for the creation of manufacturing ecosystems on a scale unseen elsewhere. Foxconn City in Shenzhen, employing hundreds of thousands of workers in a single integrated campus, exemplifies this scale. It’s a model with no parallel in the U.S. Even as automation increases, the existing skilled and semi-skilled labor base provides a foundation and adaptability critical for the rapid product cycles common in electronics. Purpose-Built Infrastructure China didn’t just attract factories; it built the entire logistical ecosystem to support them. This infrastructure includes massive, modern ports optimized for container shipping, extensive high-speed rail networks for domestic component transport, dedicated manufacturing zones with reliable utilities, and dense clusters of suppliers. Component manufacturers, mold makers, testing facilities, and assembly plants often exist in close geographic proximity, enabling rapid iteration, troubleshooting, and production scaling — a robust supply chain ecosystem. While extensive, the U.S. infrastructure is geared mainly toward consumer logistics and lacks the hyper-specialized, manufacturing-centric density found in regions like the Pearl River Delta or the Yangtze River Delta. Recreating such an integrated infrastructure in the U.S. would require decades and astronomical investment. Robotics and Automation Adoption Counterintuitively, China is also a leader in manufacturing automation. Facing rising labor costs and striving for higher precision, Chinese manufacturers, often aided by government initiatives, have invested heavily in robotics and advanced manufacturing technologies, rapidly increasing their robot density. They possess the scale for manual assembly when needed and increasingly sophisticated automated lines for high-volume, high-precision tasks. This combination of flexible manual labor capacity and advanced high-precision automation enables Chinese firms to stay competitive across a wide range of manufacturing complexities. While the U.S. has advanced automation capabilities, the scale of deployment within integrated electronics ecosystems lags behind China. Aggressive Government Financial Support The Chinese government has treated the development of its manufacturing sector, especially in strategic areas like electronics, as a national priority. To support this goal, it has provided massive, sustained financial support through various mechanisms: direct subsidies to manufacturers, low-interest loans from state-owned banks, tax incentives, government funding for research and development, land grants, and, sometimes, less tangible benefits like expedited regulatory approvals. This coordinated, long-term state backing created an environment where companies could invest heavily in capacity and technology with reduced financial risk, fostering the sector’s rapid growth. Organizations like the IMF have analyzed this approach as having significant trade implications. Decades-Long Hollowing Out of U.S. Manufacturing The rise of China’s manufacturing prowess coincided with a decades-long decline in U.S. manufacturing capacity, particularly in electronics assembly and component production — excluding some high-end areas like advanced semiconductor design. This wasn’t a sudden collapse but a slow bleed driven by corporations seeking lower production costs and focusing on design, marketing, and software — the higher-margin ends of the value chain. The consequences are profound. Factories closed, equipment was sold off or scrapped, and crucially, entire generations of skilled manufacturing workers retired or moved into other sectors. The intricate networks of specialized suppliers that support complex manufacturing dwindled. Institutional knowledge — the practical expertise in running complex production lines, managing supply chains, and training technicians eroded. Rebuilding this isn’t just about constructing buildings; it’s about resurrecting an entire industrial ecosystem, complete with its human capital and specialized knowledge base. As analysis suggests, millions of jobs were lost over decades. If it took decades to dismantle, it stands to reason that it will take decades to rebuild, assuming the will and resources are consistently available. Immense Hurdles of Rebuilding: Time, Investment, and Policy Even if the U.S. were to embark on a serious reshoring effort, the practical challenges are staggering. Building Takes Time Constructing a large-scale, state-of-the-art manufacturing facility, like a modern semiconductor fabrication plant (fab), is a multi-year endeavor. It involves site selection, complex permitting processes (environmental, zoning), massive construction, installation of highly specialized equipment, and rigorous calibration and testing. A single fab can take three to five years or more, from groundbreaking to full production, costing upwards of $15-$20 billion, assuming no significant delays. To make a dent in reshoring electronics, the U.S. would need not just one but dozens of such large facilities, plus countless smaller suppliers — a monumental undertaking spanning decades. Need for Long-Term, Unshakeable Incentives Building these facilities requires colossal capital investment. Companies undertaking such investments need certainty regarding the long-term economic environment to ensure a return on investment. Incentives like tax breaks or tariff relief are often discussed. However, U.S. policy, particularly regarding trade and tariffs, has proven highly volatile, creating uncertainty that disrupts predictability and discourages investment. Tariffs implemented by one administration can be altered or removed by the next or even adjusted month-to-month based on geopolitical shifts or trade negotiations. For a factory with a 10–20-year payback period, the risk that crucial incentives could disappear within a single presidential term is a major deterrent. Investors require policy stability that extends far beyond typical election cycles — something historically difficult to guarantee in the U.S. system. Without credible, long-term, and perhaps even legislatively locked-in incentives, the financial risks of massive reshoring investments are often too high for private companies to bear alone. US Lacks Skilled Labor for Electronics Work Beyond physical infrastructure and policy, there’s the human element. Skills Gap Decades of de-emphasis on manufacturing have led to a significant mismatch between the skills needed for advanced electronics manufacturing and those prevalent in the U.S. workforce. Modern electronics production requires highly skilled technicians proficient in robotics, process control, cleanroom protocols, quality assurance, specialized equipment maintenance, and engineers with deep expertise in manufacturing processes. While the U.S. excels in design and engineering, the pipeline for skilled manufacturing technicians and engineers has shrunk considerably. In contrast, China produces vastly more engineers and technicians annually, many specifically trained for manufacturing roles, although challenges remain in aligning skills with industry needs globally. Rebuilding America’s vocational and technical training systems to meet this demand will require long-term investment and a shift in educational and cultural priorities. Workforce Discrepancy There’s a stark contrast between public sentiment and individual career choices. Surveys consistently show overwhelming public support (around 80%) for bringing manufacturing back to the U.S., a sentiment that holds across party lines and contexts. Yet only 20%–25% say they would consider working in a factory. This disconnect reflects changing career aspirations, perceptions (sometimes outdated, though improving according to some studies) of factory work as monotonous or physically demanding, and the availability of jobs in the service, tech, and gig economies. Even with training programs and improving perceptions, attracting and retaining a sufficient number of workers willing to take on demanding manufacturing roles, potentially at wages that must still compete globally (even with automation), presents a significant social and economic challenge. Catching Up: The Price Tag of Reshoring China’s manufacturing dominance was built on decades of massive, state-directed investment, which created systemic advantages and sometimes led to global overcapacity issues. For the U.S. to catch up, particularly in a mature industry where China already has established economies of scale and integrated ecosystems, the required investment would likely need to be even larger and more sustained. Closing that gap isn’t just about subsidizing factory construction. While initiatives like the CHIPS Act represent important progress, they address only a portion of the broader manufacturing ecosystem. Achieving true competitiveness would require coordinated public and private investment in workforce development, infrastructure, supply chains, and advanced manufacturing capabilities. Sustaining such an effort over decades would demand a level of political consensus and fiscal commitment that is historically difficult to maintain in the U.S. Wrapping Up The desire to reshore electronics manufacturing is understandable and driven by legitimate economic and security concerns. However, the practical realities paint a picture of immense difficulty, particularly in the near term. China’s entrenched advantages in scale, infrastructure, government support, and, increasingly, automation create a formidable barrier. Decades of U.S. manufacturing decline have left deep gaps in physical capacity, supply chains, and skilled human capital. Rebuilding requires not only time — years to build individual plants and decades to reconstruct ecosystems and workforces — but also unprecedented levels of sustained investment and, critically, long-term policy stability that is antithetical to recent U.S. political history. While targeted investments in strategic niches like advanced semiconductors are possible and underway, the wholesale return of the broad electronics manufacturing ecosystem seen in Asia remains, for the foreseeable future, an aspiration facing near-insurmountable obstacles. It’s a multi-decade marathon requiring unwavering national commitment, not a sprint that can be won with short-term policies or wishful thinking. Corleo: Kawasaki’s Hydrogen-Powered Horse Robot Imagine a future where transportation isn’t limited to wheels or wings, but steps confidently over rough terrain. Kawasaki is bringing that vision closer with “Corleo,” a fascinating hydrogen-powered, rideable quadruped robot — essentially, a robotic horse unveiled for Expo 2025 Osaka. This isn’t just science fiction — it’s a glimpse into practical future applications, as seen in Kawasaki’s concept video: Why a robot horse? Think about the advantages. Real horses are incredibly sure-footed and capable of navigating landscapes that would stop most motorcycles or ATVs cold. However, they require significant upkeep — feeding, stabling, and veterinary care — while motorcycles lack that all-terrain agility. Corleo aims for the best of both worlds: the potential sure-footedness of a quadruped — similar to advancements seen in other four-legged robots — combined with the lower maintenance of a machine powered cleanly by a 150cc hydrogen engine that generates electricity for its legs. The potential applications are exciting. Corleo could be invaluable for remote rescue operations. Picture sending a team of these into disaster areas or rugged wilderness where vehicles can’t reach. If developed with autonomous capabilities, Corleo could even venture into dangerous zones alone to locate and extract individuals, minimizing risk to human rescuers. Future Possibilities for Kawasaki’s Robot Horse Beyond rescue, imagine other uses: military transport in challenging environments (effectively bringing back the cavalry, but robotic!), unique, eco-friendly tour vehicles offering silent traversal through nature parks, or even as a fascinating, low-maintenance alternative for someone wanting an exotic pet without the biological demands. What could Corleo evolve into? Perhaps faster, more agile versions, integrated with advanced AI for complex tasks or specialized models for specific industries. It represents a stepping stone toward more versatile and adaptable robotic mobility, though the current capabilities are limited compared to the concept vision. Honestly, forget the sports car — a hydrogen-powered robot horse that can traverse mountains? Now that would make an incredible birthday gift for someone adventurous (hint: my birthday is coming up). Kawasaki’s Corleo isn’t just a robot; it’s a four-legged stride into the future — and my Product of the Week.