International trade exists. It has existed for thousands of years. Joseph and the Amazing Technicolor Dreamcoat tells the story of a boy sold to passing traders going from approximately modern Iran to Egypt. International trade in grain was an outcome of the story. That happened maybe 3,500 years ago. The benefits and exasperations of international trade continue unto this day. (Thinking of this week’s OPEC+ decision to reduce oil production to force up the price.)
I favor globalization in many guises. But…and it’s a big but as they say…there are national priorities. I had a customer in the defense industry back in the 90s. I wondered about outshoring back in those days. What if our nation’s defense was put at the mercy of a future enemy? Not to mention all those over-educated MBAs with their spreadsheets figuring it was cheaper, and hence more profitable, to send manufacturing work overseas.
Supply chain problems even before the pandemic were causing a rethinking of that latter strategy. The Reshoring Initiative has compiled some latest numbers.
In 2021, the private and federal push for domestic supply of essential goods propelled reshoring and foreign direct investment (FDI) job announcements to a record high. Projections from Reshoring Initiative 1H 2022 data show reshoring and FDI continuing these gains. The current 2022 projection of jobs announced is around 350,000 – another record and up from 260,000 in 2021. If the projection is achieved, 2022 will bring the total jobs announced since 2010 to over 1.6 million.