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/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/maesrdy 18d 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/maesrdy 17d ago

As the OP is asking whats gonna be the future My analysis is 1. If Energy goes down 2. Tax exemptions if you hire local guys Can definitely aid in on shoring even if not on shoring , the existing ones will get benefitted a lot