Editor’s note: Before you read part two, make sure you read part one. The views expressed in this column are solely those of the author.
Shortages of everything from rare earth minerals to antibiotics have put America in the unenviable position of losing control of the supply of many critical products and materials, making us susceptible to price manipulation and economic extortion. It has also made citizens vulnerable, as in the case of life-sustaining medicines.
If a country like China were to suddenly stop all exports to America for political reasons, the U.S. would be trapped in a situation of our own making, where we could not, in the short run, come up with an alternative supply. China has imposed temporary bans on gallium and germanium (essential for high-frequency microchips, fiber optics and defense radar systems)—and it controls more than 90% of global production. China has routinely tightened export rules and licensing to squeeze Western tech supply chains on rare earth elements and antimony—a key component in lead-acid batteries and electronics.
From both an economic security and national security point of view, we need to reclaim supply chains from China and other countries for everything from pharmaceuticals to semiconductors.
Reshoring Is Not Happening
Even though President Trump emphasized reshoring in his “America First” program, reshoring production is a low priority for American corporations. According to Accenture's Pulse of Change Survey, fewer than one -third (29%) of supply chain and engineering leaders plan to reshore or near-shore operations. Trump’s America First Program doesn’t seem to be working.
President Trump's tariff program has failed to drive massive reshoring for several reasons:
- Reshoring Costs: The big problem with reshoring is the investment cost to move production back to the U.S. and the fact that the highly skilled labor needed is no longer available or must be trained from scratch.
- Ecosystems Take Decades: Moving a factory requires local access to specialized parts makers and raw material vendors, which can’t be built overnight.
- Tariff Changes: Court rulings challenging executive tariff authorities and ongoing negotiations by the Trump administration make companies fear that investing billions to move operations might become a bad bet if rules change again.
A good example of the cost of reshoring is the Apple iPhone. Apple estimates that it would take many years and cost billions of dollars to build new plants and production lines to manufacture iPhones in the U.S. They also estimate that the retail price would increase anywhere from $1,500 to $3,500 per phone. In addition, Apple CEO Tim Cook does not think there is a labor pool with enough workers with the vocational skills to manufacture iPhones in the U.S. Apple makes a good point in that some outsourced products, particularly consumer products, may not have a cost justification for reshoring.
Tariffs
President Trump's tariff program has failed to drive massive reshoring. The problem with Trump’s tariff program is that ongoing changes have created uncertainty. Frequent flip-flops, sudden delays and shifting tariff rates created severe unpredictability for corporate planners.
Following the "Liberation Day" announcement on April 2, 2025, the Trump administration enacted numerous ongoing adjustments, including a 90-day baseline pause, a sequence of temporary truces and more than a dozen separate framework deals or country-specific reductions negotiated through late 2025 and early 2026.
Import levies on autos, steel and global trade partners were frequently adjusted, paused or reinstated to create immediate negotiating leverage rather than operating as stable, predictable tax rules. Rather than spending huge sums to reshore, corporate executives have chosen to wait or shift supply chains to other low-tariff foreign nations instead of reshoring to America.
The administration's preference has been for fluid, discretionary pressure over codified schedules. President Trump famously treats tariffs as aggressive leverage and short-term bargaining threats to force trading partners to the negotiating table rather than relying on fixed, predictable long-term schedules. Trump routinely announces high, sudden tariff rates (such as 25% or 50% levies) to create an immediate crisis, prompting dozens of countries to quickly request talks with the White House. His bargaining style is designed to secure fast concessions rather than structured, multi-year, multilateral phase-ins.
The administration put Section 232 tariffs on steel and aluminum imports, describing these metals as a national security issue. The tariffs were 50% and included downstream and derivative products. Currently, the administration is negotiating with Canada and considering reducing the tariff rate from 50 to 25%. The Coalition for a Prosperous America says, “At 50%, U.S. extruders can compete. At a flat rate of 25%, many would be underwater.” American corporations have made investments in these industries based on the 50% tariff rate.
If these metals need to be protected because they are national security industries, the Trump administration shouldn’t do another tariff flip-flop, using the industries as bargaining chips and trading away their protection.
The chaos of his tariff strategy was made worse when the U.S. Supreme Court struck down broad emergency-powers tariffs, forcing the White House to pivot to alternative statutory authorities to keep its leverage intact. If the administration’s goal was to use tariffs to put financial pressure on American corporations to reshore their production, Trump’s approach to tariffs isn’t working.
We need a stable, predictable multi-year tariff schedule, based on protecting specific industries and technologies, with limited retroactive changes or sudden executive flip-flops. The tariff plan should be designed to convince corporations that tariffs are permanent. If the Trump tariff program can’t be made into a long-term, stable schedule that businesses can use in their planning, there is little hope that corporations will reshore production.
Using Subsidies & Tax Credits
The precedent for subsidies was set when the bipartisan CHIPS and Science Act of 2022 appropriated $52.7 billion for direct semiconductor manufacturing incentives, research and development (R&D), and workforce training. The CHIPS Act sparked more than $540 billion in private commitments across multiple states from global and domestic chipmakers. It also created:
- 16 to 19 new semiconductor manufacturing facilities (fabs) and major site expansions now under development across multiple states
- Multi-billion-dollar direct funding agreements locked in for industry leaders, including Intel ($7.86B final), TSMC ($6.6B), Samsung ($6.4B) and Micron ($6.1B).
- Subsidies have created 115,000 new construction and manufacturing jobs nationwide, directly boosting regional economies.
- Targeted federal funding rounds (such as an $874 million R&D push targeting advanced packaging and AI memory architectures) to secure next-generation technology pipelines.
Evidently, President Trump is not a supporter of subsidies because, on March 6, 2025, he urged Congress to repeal the balance of $52.7 billion of the CHIPS and Science Act. Trump said, “Your CHIPS Act is a horrible, horrible thing. We give hundreds of billions of dollars, and it doesn’t mean a thing.”
What Trump doesn’t seem to understand (or accept) is that many other industries do not want to reshore production unless they can get subsidies, such as:
- Clean energy and renewables: Solar panels, wind turbines and electric grid infrastructure want the government to reinstate the 7.5% tax credit.
- Critical minerals and mining: To reshore production, the critical minerals industry wants direct equity investments, multi-billion-dollar price floors and purchase guarantees to hedge against volatile foreign pricing, expanded production tax credits, streamlined federal permitting, and strict import protections or tariffs to block manipulated, below-cost foreign competition.
- Pharmaceuticals: A bill in Congress called the Pills Act is designed to incentivize pharmaceutical companies to move the manufacturing of generic drugs and critical active pharmaceutical ingredients (APIs) back to the United States. The program offers a Production-Based Tax Credit (PBTC) of 35% for final manufacturers of APIs and finished drug products, and a 30% credit for all other constituent components.
- Shipbuilding: A bill in Congress called the Ships for America Act aims to grow the U.S.-flagged international commercial fleet by 250 ships over a decade, rebuild shipyards and fund workforce training. The bill is estimated to cost taxpayers $2.1 billion.
- Automotive: Major automotive industries lobby for and expect financial support, tax breaks or tariff offsets before moving or expanding production onshore.
But tax credits and subsidies beg the obvious question. How many industries can America support with tax credits and subsidies like Biden did in the Chips Act? This is not the complete list of American industries that want subsidies to reshore production. Still, a financial and economic limit exists on how many subsidies the nation can afford.
Subsidizing all of these industries would require hundreds of billions, if not trillions and could trigger severe inflation or a debt crisis. With the U.S. national debt now exceeding $40 trillion and annual budget deficits tracking past $1.9 trillion, the federal government lacks the fiscal capacity to subsidize every sector.
The government should begin by selecting and prioritizing the key industries and technologies most important to the economy or those that must be protected. We should prioritize industries with severe product shortages because of dependence on imports. We need to finally develop an industrial policy and master plan with measurable objectives and timelines instead of making it up as we go along.
No More Policy Whiplash
President Trump's industrial strategy relies on bilateral dealmaking, shifting tariffs, and executive leverage rather than a fixed master plan. This approach treats economic policy as a tool for immediate political and market pressure rather than a rigid, long-term blueprint.
I think Trump’s strategy comes from decades as a real estate developer, where rules are fluid and everything is negotiable. This approach relies on extreme initial demands, public pressure and intentional unpredictability to force opponents into concessions. Trump routinely starts with extreme positions or threats—such as sudden tariffs or ultimatums—to set the negotiation baseline in his favor.
Unpredictability is used as a deliberate tool to keep adversaries and allies off-balance, disrupt their planning and force them to seek compromise. A standard pattern involves applying heavy pressure, creating artificial urgency, and then pausing or walking back threats once the other side comes to the table.
Shifting parameters allows him to frame any eventual outcome—regardless of how much it deviates from his original rhetoric—as a victory in deal-making. Rather than traditional diplomacy built on steady, long-term alignment, his nature treats governance as a series of high-stakes leverage plays designed to bend others to his immediate will.
Trump's approach might have worked well in real estate and fit his personal preferences and style, but it hasn’t worked for his tariff or America First programs. The problem with Trump’s approach is that it creates uncertainty for businesses, and they tend not to cooperate: Rapidly changing trade rules and on-again, off-again tariff announcements complicate long-term capital allocation and supply chain forecasting for corporations. Trump’s constant vacillation and shifting initiatives make it hard for businesses to plan for the future.
Economic Security Is National Security
The Trump administration's commitment to the doctrine that economic security is national security won’t work unless we stop depending on foreign countries for critical products, begin reshoring them and develop a stable tariff strategy corporations can rely on.
China has a strategic advantage over the U.S. because it developed a 10-year plan called Made in China 2025 that listed and prioritized the industries and technologies it wanted to dominate. We need a similar plan that describes the industries and technologies we want to reshore, sets tariff rates on these technologies and industries, and convinces businesses that the plan is a long-term commitment they can count on. The plan should include:
- Critical technology and industry selection and priorities.
- Temporary, zero-tariff exemptions for raw materials or intermediate goods not yet produced domestically during the initial ramp-up phase.
- Industrial subsidies and tax credits locked into permanent baseline budgets to survive administration changes.
- Federal government multi-year procurement contracts that guarantee baseline demand for new domestic manufacturing facilities.
- Co-funded dedicated technical training programs directly tied to regional manufacturing hubs to guarantee localized talent availability.
However, I am a realist and understand that long-term industrial planning may not fit President Trump’s nature or style.
Michael Collins is the author of a new book, "The Globalization Trap," available on Amazon. He can be reached at [email protected] or on mpcmgt.net.
