Harry Moser is the Founder and President of the Reshoring Initiative* (reshorenow.org). If you’re not familiar, the Reshoring Initiative focuses on bringing manufacturing jobs back to the United States. One of the most useful tools the Reshoring Initiative uses to make the case is their Total Cost of Ownership (TCO) Estimator. This free tool, available on the Initiative’s website, helps companies evaluate the full cost of sourcing decisions by considering factors such as tariffs, freight, inventory carrying costs, and geopolitical risks. While price disparities, largely influenced by wage differences, often drive offshoring, the TCO analysis reveals that U.S. manufacturing can be competitive in many cases. Harry and his team also highlight the importance of mitigating geopolitical risks, like potential disruptions with China, and advocates for systemic changes such as improved workforce training and value-added taxes tomake U.S. production competitive with imports. Through these efforts, the Reshoring Initiative empowers companies to make more informed, resilient decisions that benefit their bottom line and national interests.
As global supply chains evolve, small to medium-sized manufacturers are uniquely positioned to benefit—or face challenges—depending on the strategies and policies adopted. WHN sat down with Harry recently where he shared his comprehensive insights on the future of domestic manufacturing, the impact of Trump administration anticipated policies, and how manufacturers can participate in the reshoring wave.
The Impact of ‘America First’ Policies
When asked about the Trump administration’s ‘America First’ policies, Harry explained that the approach is not about putting the U.S. on a pedestal but about leveling the playing field. “I like to think of it as America is no longer last,” Harry said. “All the other countries have industrial policies to strengthen their economies while we just sit there getting punched by everybody else.”
According to Harry, these policies are likely to create significant opportunities for contract manufacturers. As large OEMs increasingly source components domestically and shift assembly operations back to the U.S., smaller manufacturers will see a surge in demand. “The percentage increase in volume or business for contract manufacturers is going to be two or three times as much as for the OEMs,” Harry explained.
However, Harry also highlighted potential challenges. Increased tariffs on imported components could raise costs by 10-15%, potentially making domestic manufacturers less competitive unless equivalent tariff rates alsoapply to wire harnesses. Politicians, he added, often focus on big-ticket projects like chip plants, overlooking smaller manufacturers. “For every job that winds up at one of those factories, I believe there’s two or three jobs at supply chain companies,” Harry said, stressing the importance of the broader manufacturing ecosystem.
Policies and Incentives for Encouraging Reshoring
Workforce development emerged as Harry’s top priority for fostering reshoring. “If you do everything else—tariffs, lowering the dollar, providing incentives—but you can’t find anybody to work in the factory, it’s all purposeless,” he stated. Harry pointed out that countries like Germany, Japan, and Switzerland have thriving manufacturing sectors because of their skilled workforces. In the U.S., a lack of comparable training programs has hindered manufacturing growth.
Harry is a strong advocate for apprenticeships as a solution to this problem. “We’ve been doing a series of articles about apprentice graduates who are now industry leaders,” he said. “One of the criteria is they have to be making income equal to or greater than the average for PhDs to show young people they can achieve the same level of success without years of college and hundreds of thousands of dollars of debt.” He would love to hear from any readers who meet those criteria.
In addition to workforce development, Harry emphasized the importance of maintaining policies like the immediate expensing of capital equipment, which encourages manufacturers to invest in automation. “A lot of companies decide to pull automation investments forward because they can write it off immediately,” he said. However, he warned that this benefit is being phased out, which could slow modernization efforts.
Global Implications of Reshoring
Harry explained that reshoring is not confined to the United States but is part of a global trend. “There is definitely a trend in North America towards localization or regionalization in manufacturing,” he said. Canada and Mexico, in particular, are benefiting, with Mexico having a significant advantage due to its much lower labor costs. Beyond North America, countries like the UK, Australia, Japan, and South Korea are also emphasizing reshoring.
Harry attributed the U.S.’s success in reshoring to a combination of policy and business decisions, noting the rapid growth of manufacturing jobs. “In 2010, 11,000 jobs were announced coming back through reshoring and foreign direct investment. Last year, that number was 287,000,” he said. This progress has positioned the U.S. as a global leader in reshoring, with other countries looking to emulate its strategies.
Harry also addressed the misconception that the U.S. started a trade war under the Trump administration. “Many of our competor countries started the trade war decades ago,” he argued. “Trump just decided to participate and not be a punching bag for other countries[HM1] .”
Competing with Higher Labor Costs
Higher labor costs remain a significant challenge for U.S. manufacturers, but Harry believes that automation is essential to bridging this gap. “The U.S. has done a horrible job of automating,” he said, pointing out that labor productivity in manufacturing has grown by less than 0.5% annually over the past 15 years, compared to 6% in China. China’s heavy investment in robotics and advanced manufacturing tools has allowed it to maintain both high productivity and low costs, a combination the U.S. struggles to match.
While automation can improve efficiency, Harry warned that it is not a cure-all. “Some people say if you automate enough, everything will be okay. I say no,” he explained. “China and other countries are automating as much as they can, and their wages are still lower. If we just automate at the same level, we’ll still lose. We also need some combination of lower USD and tariffs to make the automation profitable
Harry argued that reshoring and increased domestic demand are critical to enabling automation. “Factories only invest in automation when their capacity utilization is 80% or higher,” he said. “Below that, they don’t need it and maybe can’t afford it. When factories are busy and profitable, they can justify the investment.”
High-Volume Production in a Reshoring-Driven Market
Harry also discussed the challenges of transitioning to high-volume production, which is essential for achieving economies of scale in reshoring. “There’s more profit margin built into low-volume, high-mix manufacturing, but if you really want to have a strong industry, it should focus on high-volume, low-mix production,” he said. This type of manufacturing relies heavily on automation, where machines run continuously with minimal labor intervention.
One obstacle is the cost of components like wire and connectors, which are often 20-30% cheaper overseas. Harry suggested that addressing these cost disparities is essential for making high-volume production competitive in the U.S. He also noted that small manufacturers are often hesitant to invest in automation due to uncertainty about future demand. “If companies saw they were going to have big quantities, they’d be able to justify the investment in automation,” he explained.
Building a Sustainable Manufacturing Future
In his closing remarks, Harry outlined several additional steps the U.S. can take to strengthen its manufacturing base. Improving access to capital is critical, particularly for small manufacturers that struggle to secure loans for automation. Harry proposed linking loan guarantees to workforce development, such as offering $250,000 in financing for each apprentice hired. “It’s the kind of thing that could knock off two birds with one stone,” he said.
Harry also stressed the importance of maintaining policies that incentivize investment. “Keeping the immediate expensing of equipment purchases is important to get and keep companies investing,” he said. At the same time, he argued for structural changes, including lowering the corporate tax rate and implementing tariffs or currency adjustments, to create a competitive environment for U.S. manufacturers.
Final Thoughts
Reshoring represents a critical opportunity for U.S. manufacturers, but success depends on a combination of strategic policy interventions and industry-led initiatives. Harry’s insights highlight the importance of workforce development, automation, and supportive economic policies in creating a sustainable manufacturing ecosystem. “You can’t hike corporate tax rates or fail to address workforce development and expect manufacturing to thrive,” he concluded. With reshoring already underway globally, the time to act is now.
