Reshoring advocate discusses tariffs, turmoil and timelines

Moser encouraged manufacturers to “turn uncertainty into opportunity.” 

“If you’re a job shop, if you’re an injection molder … your customers are facing uncertainty. They don't know what’s going to happen. There’s a possibility they’ll have significant tariffs on them in three months, six months … and especially if the tariffs have already been announced, but you’re not sure how long they’re going to last, it’s a perfect time to get them to reshore and buy components from you,” he said.  

With so much resin produced in the U.S., especially with the availability of untapped shale-gas reservoirs, Moser said injection molding is one industry that’s poised to benefit from reshoring opportunities.  

“If you’re going to pick a product category to reshore, I think injection molding is one of the best,” he said.  

But in competing with countries with lower labor costs, part cost alone can’t be the selling point for American manufacturers, Moser said. Instead, he recommends that manufacturers show customers and prospective customers the value they can provide in other ways — such as quality, convenience and supply chain certainty.  

His organization’s Total Cost of Ownership (TCO) Estimator tool helps users quantify these other factors, so American manufacturers are better able to make their case. 

“So, if a customer is getting product, say from China or Taiwan or somewhere like that, and there’s a chance of war over Taiwan, if that happens, that supply chain is going to be shut down for months or years, who knows how long, and every company is going to be searching for a new source. … The customers that are going to survive are going to be the ones that already have their sources here, because they’ll be able to get product [and] they’ll be able to keep making their end product,” he said.  

Parsing policy  

Established in 2010, the Reshoring Initiative is focused on returning jobs to the U.S. According to its website, “The increasing advantages of producing near the customer have driven companies to bring approximately 250,000 manufacturing jobs to the U.S. from offshore since January 2010. The inflow of jobs now roughly balances the outflow, but, based on the country’s $500 billion/year trade deficit, there are still about four million potentially recoverable jobs offshore.”   

Moser is dedicated to the goal, but his ideas for how to achieve it go beyond tariffs, which he calls his “third choice,” behind workforce development and an approach to monetary policy that would actually lower the value of the dollar globally.  

“Basically, if you want to achieve what Trump wants to achieve — I do want him to succeed. He wants to bring manufacturing back to the U.S. … We specifically want to balance the goods in trade, which means you’d have to increase U.S. manufacturing about 40 percent — so, a huge increase — and the reason we have such a big trade deficit is cost. Manufacturing cost in the U.S., on average, is 40 percent higher than China, 10 percent, 20 percent higher than France, Germany, Japan, South Korea and so on. We have trade deficits with almost every other country. So, we’re just not competitive.” 

When it comes to training opportunities, such as apprenticeships, Moser said he believes the U.S. is trending in the right direction. But to narrow the deficit, it’s going to need many more people in manufacturing. According to the Manufacturing Institute, over 2.1 million manufacturing jobs could go unfilled in the years ahead as the workforce ages and shrinks. 

“If you’re going to increase manufacturing by 40 percent, even with automation, you need 30 percent more people, or some number like that, and we have shortages already, especially skilled workers,” Moser said. “So, our No. 1 priority is definitely a skilled workforce, that we should have an apprenticeship system, more like Germany’s [where] half the kids coming out of high school go into apprenticeships.” 

To continue to grow the workforce, agencies like the U.S. Department of Labor need to broadcast the opportunities in manufacturing, Moser said. 

For example, the annual rate of reshoring has gone from 11,000 jobs per year in 2010 up to 240,000 per year last year — a significant jump that’s not sustainable unless more young people go into the sector.  

Manufacturers “could reshore a lot of work if they had the quantity and quality of a skilled workforce that they’d like to have. ... No. 1 is a skilled workforce, because if you don’t have it, you can have all tariffs you want, you could do all the other things Trump wants to do and nobody’s here [to make products], it’s not going to get made.”  

Also of paramount importance to Moser, as well as to manufacturers, according to a survey he cited, is monetary policy. 

Rather than lobbing threats of cross-border tariffs, he advocates for a value-added tax (VAT), a consumption tax assessed on the value added in each production stage of a good or service.  

Moser said a VAT works like a sales tax, “but it has the added advantage that it applies to all imports and that every export gets a credit, so it recovers all of those taxes that have been built up in all the layers and so it taxes imports and subsidizes exports.” Additionally, he said, “it applies to everything from everywhere, forever.”  

He said he believes the strategy would help boost both imports and exports.  

Moser said he worries that Trump’s waffling over tariffs could lead affected countries, like Canada, simply to tune out the threats, in the belief that the U.S. will eventually abandon the policy. 

But U.S. competitors already impose a VAT, which has proved to have staying power.  

“Our competitor nations all have it. It impacts our product, and we ship it to them. It helps their exports. When they export to us, we don’t do it,” Moser said. “If we do it, they can’t retaliate, because we’re just doing what they’ve been doing to us for 30 years.”  

The cost of exporting goods, though, is just one advantage foreign companies have over domestic manufacturers. For Moser, a significant issue is the cost of labor — a problem he’d like the country to address by lowering the value of a dollar around 20 percent, through a mechanism called a market access charge. 

“If you want to be competitive, you have two choices: Either cut everybody’s wages — you’re not going to be very popular — or you get the dollar down, which has much less effect on the real income of people.”  

He acknowledged that this approach has largely been verboten — but he thinks it’s time to reconsider.  

“Over a couple years, five years, get the dollar down by 20 percent and keep it there. Some people say they want a strong dollar. Others say they want a steady dollar. And we say, ‘Yeah, steady, but 20 percent lower,’ because eventually, if you don’t do that, if we fail, if Trump fails, if we don't eliminate the $1.2 trillion trade deficit and the budget deficit, eventually the dollar’s going to collapse,” he said. 

The road ahead 

Having established an organization that’s focused on reshoring, Moser is bullish on American manufacturing. 

But he knows the decisions being made today won’t bear fruit immediately. While the chaos of the last few months has brought attention to the goal, reshoring also will require work that might grab the headlines. After all, developing workers takes years, as will changing the culture to entice others to follow in their footsteps.  

While tariffs might lure some jobs back, Moser suggested that the ongoing battles over factors and rates might not prove as productive. 

“I think a little chaos at the beginning may be good for getting people's attention, but ongoing, back and forth, changing the day, changing the amount, changing the country and the product, I think it’s just a waste of everybody’s time. Make your mind up. Go for it,” he said.