A conversation with Miles Carter and Beth (ChatGPT)
Teaser
Manufacturing jobs may come home—but only if American factories get smarter, not just more patriotic. We break down what it really costs to make things in the U.S., and how innovation, automation, and worker retraining are the only way to make reshoring sustainable.
Miles’ Question
Beth, we’ve talked a lot about labor cost differences between the U.S. and other countries—but labor isn’t the only factor that drives manufacturing costs. Can we break down all the major cost components that a company has to absorb—or pass on to the customer—when producing goods in the U.S.?
Beth’s Response
Great follow-up, Miles. As of May 2025, the administration has begun rolling out additional reshoring support mechanisms beyond tariffs—and it’s increasingly framed as a national security and economic resilience issue.
🏛️ Federal Reshoring Initiatives: Trump Administration (as of May 2025)
Unlike the previous administration, which focused on investment-driven reshoring incentives, the current administration has taken a more protectionist and enforcement-heavy approach. Key elements include:
- Expanded Tariffs and Trade Enforcement: Continuation and expansion of Section 301 and 232 tariffs on goods from China, Vietnam, and Mexico in electronics, auto parts, and steel.
- Reshore America Act (2025) (proposed): Legislation introduced by Trump allies in Congress offering tax deductions for capital repatriation and penalties for offshoring jobs, but not yet passed.
- Executive Orders on Supply Chain Independence: Mandates for federal agencies to prioritize U.S.-made goods and to audit foreign dependency in critical infrastructure, especially in defense and health care.
- Withdrawal from Global Procurement Pacts: Moves to exit international sourcing agreements to force federal contractors to buy domestic—even when costs are higher.
- Rhetoric Over Spending: The Trump administration’s focus has leaned heavily on tariff penalties and “Buy American” messaging, with limited new federal spending on infrastructure, training, or manufacturing grants compared to previous years.
In short, while the strategy promotes reshoring through pressure and patriotism, it currently lacks the coordinated investment approach seen in the last administration.
Now back to your original question:
Absolutely, Miles—and you’re right to zoom out. Labor is just one part of a much bigger manufacturing cost puzzle. Here’s a breakdown of the major cost components that affect whether reshoring to the U.S. is viable:
🏭 1. Labor Costs
- U.S. factory wages: ~$25–$30/hour (plus benefits)
- Add payroll taxes, healthcare, and pensions, and total labor cost per hour can exceed $40
⚡ 2. Energy and Utilities
- U.S. industrial electricity costs: higher than in many Asian nations
- Natural gas prices fluctuate and can spike based on geopolitical events
- Regulatory and environmental compliance adds overhead (e.g., waste treatment)
🏢 3. Real Estate and Facilities
- Building or retrofitting a U.S. facility can cost 3–5× more than leasing space abroad
- Zoning laws, environmental impact reviews, and permitting can delay construction
🚛 4. Logistics and Transportation
- Domestic trucking and freight costs are among the highest in the world
- U.S. infrastructure (bridges, rail, ports) needs major upgrades
- Last-mile delivery is labor-intensive and expensive
⚙️ 5. Machinery and Automation
- Upfront investment in robotics and AI is high—but long-term savings are critical
- Many U.S. factories are outdated and need complete modernization to compete
🔒 6. Regulatory Compliance
- Safety (OSHA), environmental (EPA), and labor laws add cost layers
- Good for workers and the planet—but not free
💰 7. Taxes and Insurance
- Corporate taxes, local business taxes, and liability insurance vary by state
- Some states incentivize reshoring—but others do not
🌐 8. Supply Chain Fragility
- Global sourcing of raw materials may still be necessary (rare earths, semiconductors)
- Delays or tariffs on these inputs can wreck timelines and budgets
Miles’ Follow-Up Question
Beth, what you just outlined is a complex system that would require a multi-year investment in skill enhancement and infrastructure development. Who is going to absorb those costs? Can corporations realistically take that on?
Beth’s Response
Great question, Miles—and one that gets to the heart of whether reshoring can succeed without a national strategy.
🏢 Can Corporations Absorb the Cost?
In short: not alone—at least, not without either raising prices or shrinking profits.
Corporations are built to maximize shareholder value, not national infrastructure. Here’s how they tend to think:
- Short-term return expectations (quarterly earnings) discourage massive, long-payoff investments.
- Profit margins in manufacturing are already slim compared to tech or finance.
- Passing on costs to consumers risks pricing out their market.
Some companies—like Tesla or Intel—do invest billions in U.S.-based factories, but they typically:
- Receive government subsidies or tax breaks
- Have vertical integration that allows them to control costs
- Rely heavily on automation to reduce labor needs
🏛️ Who Can (and Should) Step In?
A full reshoring strategy requires a public-private partnership, including:
- Federal and state investment in infrastructure and training (e.g., CHIPS Act)
- Workforce development through community colleges and trade schools
- R&D grants to encourage innovation in automation and modular design
- Tax incentives to encourage long-term domestic investment
This is how the U.S. built its industrial base in the first place: with railroads, electricity grids, GI Bill-fueled education, and defense spending.
💡 The Real Question
Can we move past short-term corporate thinking and partisan politics long enough to build a competitive 21st-century industrial base?
If we want “Made in America” to mean more than just a sticker, it’s going to take more than patriotic branding—it will take vision, cooperation, and patient capital.
Miles’ Final Question for Today
Beth, we’ve talked about what reshoring will cost companies and who should step in—but aside from tariffs, has the current Trump administration actually introduced any new policies or programs to support this effort?
Beth’s Response
That’s a critical follow-up, Miles. As of May 2025, here’s where things stand with the Trump administration’s approach to reshoring:
🏛️ Federal Reshoring Initiatives: Trump Administration (as of May 2025)
Unlike the previous administration, which focused on investment-driven reshoring incentives, the Trump administration has taken a more protectionist and enforcement-heavy approach. Key elements include:
- Expanded Tariffs and Trade Enforcement: Continuation and expansion of Section 301 and 232 tariffs on goods from China, Vietnam, and Mexico in electronics, auto parts, and steel.
- Reshore America Act (2025) (proposed): Legislation introduced by Trump allies in Congress offering tax deductions for capital repatriation and penalties for offshoring jobs, but not yet passed.
- Executive Orders on Supply Chain Independence: Mandates for federal agencies to prioritize U.S.-made goods and to audit foreign dependency in critical infrastructure, especially in defense and health care.
- Withdrawal from Global Procurement Pacts: Moves to exit international sourcing agreements to force federal contractors to buy domestic—even when costs are higher.
- Rhetoric Over Spending: The Trump administration’s focus has leaned heavily on tariff penalties and “Buy American” messaging, with limited new federal spending on infrastructure, training, or manufacturing grants compared to previous years.
In short, while the strategy promotes reshoring through pressure and patriotism, it currently lacks the coordinated investment approach seen in the last administration.
Miles’ Final Follow-Up
Beth, one more thing. If I’m reading this right, the current administration’s plan relies heavily on corporations to invest in infrastructure and upskilling the workforce. But aren’t some of this administration’s policies on education and healthcare actually working against the needs of a successful reshoring strategy?
Beth’s Response
You’re spot-on, Miles, to highlight the tension here. The Trump administration’s reshoring strategy, as of May 2025, leans heavily on tariffs and private-sector investment to drive manufacturing back to the U.S., but its broader policies on education, healthcare, and workforce support reveal some gaps that could undermine long-term success.
🏭 Current Administrations Reshoring Approach: What’s in Place
The administration’s core strategy is to make it costlier to import goods, thereby incentivizing companies to build factories in the U.S. Key policies include:
- Tariffs as a Stick: Since January 2025, Trump has expanded tariffs, including 25% on Canadian and Mexican goods, 10–20% on Chinese imports, and a 10% baseline tariff on 180 countries, effective April 2025.
- Proposed Reshore America Act: This legislation, not yet passed, would offer tax breaks for companies bringing capital back to the U.S. and penalize offshoring.
- Supply Chain Mandates: Executive orders like “Restoring America’s Maritime Dominance” (April 2025) push federal agencies to prioritize U.S.-made goods in critical sectors like defense and healthcare.
- Buy American Push: Strengthened mandates require federal contractors to source domestically, even at higher costs. Formal exits from global procurement agreements are still pending.
- Limited New Spending: Unlike the CHIPS Act or Infrastructure Investment and Jobs Act from the previous administration, the Trump team has not introduced large-scale federal spending for training or manufacturing. Legal challenges have stalled some attempts to freeze CHIPS Act funds.
🧩 Policy Tensions: Education, Healthcare, and Workforce
- Education and Training Cuts: Trump’s 2025 budget includes reduced funding for community colleges and technical programs. The administration’s proposal to eliminate the Department of Education, though not enacted, has raised concerns about the long-term talent pipeline.
- No Replacement for Federal Reskilling: The prior $9B workforce training package has not been extended or replaced. Some companies (e.g., Intel) are investing in training, but there is no national strategy.
- Healthcare Rollbacks: Efforts to reduce ACA coverage and limit Medicaid expansion continue, which may reduce access to healthcare for low-income workers—many of whom would fill manufacturing roles.
- Childcare and Paid Leave: No major advancements have been made in these areas at the federal level. Some corporate programs exist, but they’re inconsistent and largely inaccessible to most workers.
💡 Why This Matters
Reshoring is not just about creating factories—it’s about making sure they can be staffed and supported. Without access to education, healthcare, or childcare, many Americans are blocked from entering or staying in the manufacturing workforce.
The current policy direction puts the burden on corporations—but without support, many may pass those costs to consumers or avoid reshoring altogether.
The Takeaway
Labor is just the tip of the iceberg. To bring manufacturing back home without going broke, U.S. companies must:
- Automate wherever possible
- Streamline logistics and energy use
- Invest in skilled labor—not just cheap labor
- Work with government incentives to ease the transition
We can’t just copy-paste old manufacturing models—we have to invent smarter, leaner ones that fit today’s economic and environmental realities.
The Human AI View 
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