Joe Biden’s Recipes to Promote Made in America and Reindustrialize the Country.
Joe Biden is also trying to score points with the American electorate a few weeks before the Midterms.
Nearly 350,000 jobs could be created this year on American soil through industrial relocation, according to the latest projections from The Reshoring Initiative. That's almost 100,000 more than in 2021 - an all-time high. Some of this relocation is due to foreign direct investment. But more than two-thirds of them are due to the creation of industrial jobs by groups based in the United States. No more “all-offshore” or “factory-less” companies: the pendulum is swinging back from Asia to America.
If this movement is part of a long trend, it has accelerated since 2020, boosted by subsidies or promises of federal investment. First there was a lot of money poured in to support the manufacture of vaccines and other medical equipment. Now, the rest of the industry is expanding, on the strength of billions to come.
In early August 2022, President Joe Biden signed into law a bill promoting semiconductor investment on U.S. soil, with more than $52 billion in subsidies to get new factories off the ground. The recently passed Inflation Reduction Act also includes measures to promote Made in America, including electric vehicles and solar panels.
The White House estimates that its pro-industry policy has led to “a historic recovery,” creating 642,000 manufacturing jobs since 2021. “Companies are reinvesting in America, bringing home good-paying manufacturing jobs,” it boasted in a recent statement, noting that factory construction has grown 116% in one year.
The investment also stems from a heightened perception of the danger of banking everything on manufacturing in Asia, according to Harry Moser, president of The Reshoring Initiative: “Before 2020, companies had begun to realize the problems of inventory, intellectual property, transportation. Now they realize that geopolitical risks can become a reality!”
The cost of dependence
The shutdown of China during Covid, then the invasion of Ukraine, and more recently the Chinese military parade around Taiwan, a mecca for computer chip production, reminded the United States of the cost of dependence on foreign producers: delivery interruptions, skyrocketing supply prices ...
“China is the leading source of batteries for electric vehicles. Tesla, Volvo, Volkswagen, etc. have realized that they can no longer depend on it. And every time they build a factory here, it's 1,000, 2,000 jobs, and thousands more in the industry,” the lobbyist enthuses.
Car batteries and other “electric devices” are at the top of the list of sectors that will be relocating in 2022, followed by chemicals (from vaccines to renewable energies such as hydrogen), transportation equipment, and electronics (solar panels, drones, robots, and more recently semiconductors).
Other factors are contributing to the success of the American factory. In particular, the prospect of benefiting from abundant and relatively inexpensive energy. “For the past ten years, thanks to the exploitation of shale gas, the United States has been paying about half the price for natural gas than other countries - excluding Saudi Arabia, etc.,” Harry Moser points out.
As for electricity, it is certainly more expensive in America than in China, “but it is much more coal-based in China,” says the consultant. So there is a lot of pressure from investors to find more sustainable energy sources. By returning home. The circle is complete!
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