Skip to content

Made in America: An Outlook for Manufacturing in the U.S

As changing U.S. trade policies continue to dominate headlines and discussion, many have examined how policy shifts will impact manufacturing, both at home and for our partners overseas. However, it’s also critical to look at the reverse — how U.S. manufacturing has impacted the policies our leaders put forward. When we do, it’s clear that the production, distribution, and consumption of goods within the U.S. have directly affected trade policy.

Trade policy does not exist in a vacuum. It is governed by a complex framework of obligations embodied in 14 free-trade agreements with 20 countries, the World Trade Organization, and other aspects of international law. According to the U.S. Department of Commerce, U.S. trade with free-trade partners represented nearly 70 percent of exports and more than 90 percent of all U.S. imports by value in 2017. Clearly, the trade policies that enable this global flow of goods are key to most U.S. industries, and commercial real estate is no exception.

This begs the question, what is the state of modern U.S. manufacturing, and how might it continue to impact trade and, consequently, commercial real estate? Modern U.S. manufacturing has been marked by shifts in production and the emergence of extensive and increasingly complex global supply chains that make manufacturing more efficient and make firms more globally competitive. This has prompted multinational firms to make significant investments in manufacturing facilities and logistics networks in the U.S. and across North America.

Still, certain trade risks have the potential to send disruptions through the manufacturing industry. For example, the implementation of trade barriers could fundamentally alter how, and from where, firms procure intermediate and final goods. This, in turn, could greatly increase the logistical complexities throughout global supply chains and substantially increase the costs of production and distribution. Even the threat of tariffs causes uncertainty and increases costs as supply chain network engineers must plan for alternative sourcing to insure against any possible disruption in production. 

Read More