Profit from the protectionist backlash

Over the past 50 years, some big manufacturing companies have moved their factories and plants from the US and other high-income countries to China, seemingly to take advantage of lower labour costs. After apparently booming in the 1980s, 1990s and even the 2000s, however, this “globalisation of production appears to have started to slow down, and in some cases has even reversed”, says Rob Lanphier, a partner at investment bank William Blair. Some of the shift has been from China to other developing countries, but state subsidies and an interventionist industrial policy mean that some of it is coming back home to the West. What does that portend for the economy and individual companies?

“Capital investment in US manufacturing has shot up and stands 12% above the trend of the past few decades”

It’s coming home

“It’s impossible to dispute” that it’s happening, says Lanphier. Significant “onshoring” (or “nearshoring”) is taking place in the US and other industrialised nations and this is “an emerging secular trend, rather than just a one-off”. Lanphier points to a report that he and Jim Jones wrote in December 2023, which uncovered several key pieces of evidence showing that there has