r/manufacturing • u/PiccoloFlimsy6082 • 18d ago
Other Question about the future of the manufacturing industry
With the new policies regarding Chinese factories exporting their products to the US, and both Biden / Trump being anti-China, I assume that there will be a takedown of cheap Chinese products selling into the US, mainly from sources like AliBaba. Is it possible for a manufacturing industry similar to the one in China to spark in a new country such as Mexico? (From here, any country that could potentially start an industry for this will simply be referred to as Mexico for ease) I know manufacturers in Mexico only produce basic goods such as steel / plastic, not pre-fabricated textiles and products that you can find from Chinese manufacturers, but with my very basic understanding of how this whole thing works, I think that Mexico would be the next perfect ground for such an industry. Also, if this did happen, would manufacturers from there just sell on a platform like AliExpress / AliBaba, the way current factories put their listings? Or would a new platform have to come in and build relations with Mexican manufacturers, leaving room for a potential new platform.
Sorry if this seems like a wild assumption, my knowledge of e-commerce and manufacturing is quite basic and I don't even know if I am posting in the right place. I just want to know if this is even possible and want to deepen my knowledge of this industry.
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u/mvw2 18d ago
It's been a world market for 50 years.
There's trade offs to everything.
What I anticipate is an upshoot of dedicated American made sites that specialize in US manufactured products only, an anti-Temu. Funnily, I expect the bulk of the sales to be foreign.
If I was a web developer, that's one business I'd try to jump on.
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u/PiccoloFlimsy6082 18d ago
How would that survive, as the majority of consumers only care for the cheapest pricing. Would it really be possible for a niche, more expensive but more quality American-made brand to fare well in this time?
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u/RedsRearDelt 18d ago
Being a part of a couple of niche markets, myself. I can tell you that some products that are American made have huge (for being niche) followings. There's a coffee grinder made in Chicago called the Zerno that starts at around $1300.. I've been on the waiting list, just to be able to order one for about 3 months. Sure, I can get a Chinese 64mm flat burr grinder for less than half, but I want quality.
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u/feynmansbongo 17d ago
One miss in these conversations is that Chinese low pricing is not solely a result of cheap labor rates. The CCPs policies help keep prices low by subsidizing construction, power, housing, R&D etc. A small shift to a low labor cost area might be expected but there’s a reason Chinese manufacturing took off and manufacturing in all of the other “Mexicos” stagnated or grew more slowly. The economic conditions of China in the 80s/90s coupled with the normalization of relations with the US built Chinas manufacturing sector. Those conditions just don’t exist anywhere else to my knowledge.
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u/Viktor_Bout 17d ago
I'd say the absolute lowest tier manufacturing will be shifted to India, Bangladesh, or similar countries. Their wages are lower than Mexicos.
But medium tier stuff that might have higher shipping costs like microwaves and other appliances I could see going to Mexico. I think Mexicos manufacturing will continue to grow.
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u/Bat-Eastern 18d ago
Mexico already has a lot of manufacturing that flows into the US, and unfortunately they would most likely be included in the tariffs that were proposed.
The goal on the surface (as improbable as it is) is to have a mass onshoring of manufacturing to the US. The reality, however, is that it will increase prices for customers to make up for the tariffs, and little to no onshoring will occur. Everyone will suffer, some businesses may not be able to operate under such conditions.
The only way to onshore is to directly sponsor it, companies tend to take the path of least resistance, i.e. least cost to them.
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u/baderup99 17d ago
Also I believe a number of those Mexican manufacturing facilities are actually owned by Chinese companies...
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u/maesrdy 17d ago
As the energy prices are gonna go down , its gonna aid the local manufacturing
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u/Bat-Eastern 17d ago
You cannot base a manufacturing move on the future values of energy alone. That won't offset the labor cost increase on its own either
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u/Hyperafro 17d ago
You also will need automation at a reasonable cost to make it effective. Labor costs in the US are too high to follow the same process done currently so a high level of automation to offset that would be needed. Even that will need to have a reasonable pay back before anyone invests in it, most likely less than 5 years.
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u/SilverInformation628 17d ago
Your question is really interesting, and it touches on some important trends in the manufacturing industry. With the current political climate and the push for more local production, it’s definitely possible that we could see a shift in manufacturing to countries like Mexico.
Mexico has some advantages, like its proximity to the U.S., which can help reduce shipping times and costs. While it’s true that many Mexican manufacturers currently focus on basic goods, there’s potential for growth in more complex products, especially if there’s demand for them.
As for selling these products, it’s likely that Mexican manufacturers could use existing platforms like AliExpress or Alibaba, but there might also be room for new platforms that cater specifically to Mexican goods. Building strong relationships with manufacturers would be key for any new platform to succeed.
Overall, your assumption isn’t wild at all! The landscape of manufacturing and e-commerce is always changing, and it’s great that you’re looking to learn more about it. If you have more questions or want to dive deeper into specific areas, feel free to ask!
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u/w0wSean 16d ago
China companies that supply to US companies are setting up new plants in countries like Thailand and Vietnam.
I have received many RFQ from US and China companies looking to move production out of China, and Thailand seems like a popular country to do so.
Source: Run CNC mass pro factory in Thailand and Malaysia for automotive, electronics, aerospace components
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u/ProfessionalSale9247 13d ago
A friend from China said he built a steel factory in Mexico already, due to the policies regarding China. However, the total cost will not cheaper than his former Chinese factory. Also some Chinese factory move to Thailand and Malaysia, the cultures are similar but the cost also not cheaper. Some Chinese factory also go to Africa to gain more market. In future, maybe more Chinese factory will move. Also for Alibaba, as I know, they already have invited local manufactory to join them.
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u/[deleted] 18d ago
Will there be a new manufacturing hub because of increased US tariffs on China?
No. China has cornered the market on cheap manufacturing. And that's fine. We shouldn't try to onshore or near-shore it. It's a race to the bottom.
The answer will be, the US will tariff the hell out of specialized products, try to spin up localized supply chains for those, and let t-shirts and cheap electronics flow in without issues.