The driving force of offshoring has been and is that United States manufacturing costs are 10%–50% higher than in almost all competitor countries.
Competing industrial economies like China undervalue their currencies, making their exports less expensive globally, while our overvalued dollar makes U.S. products more expensive and less competitive. As a result, we import many more goods than we export, leading to the large trade deficits of the last several decades ($1.26 trillion goods deficit for 2025). To address this, a targeted revaluation of the U.S. dollar (e.g., by 20%) would improve cost competitiveness and drive both reshoring and more exports. Let’s dig in:
Tariffs and currency strength
Weak demand and tariff impacts are weighing heavily on companies, with recent U.S. military actions increasing uncertainty and complexity. Tariffs provoke retaliation from trading partners, further reducing exports and introduce policy uncertainty that discourages long-term U.S. investment. Consequently, investors move capital into assets perceived as “safe havens,” like the U.S. dollar. This flight to safety strengthens the U.S. dollar, making U.S. goods and services even less competitive.
U.S. jobs steady or surging
U.S. 2025 reshoring job announcements are holding steady but could climb substantially if tariff policies become more measured, stable and long term. As global supply chains grapple with tariff uncertainty, there are many announcements of projects that are “in the works,” and other “solid” announcements from recent years that may be canceled. Ongoing tariff uncertainty and mixed messaging have slowed many reshoring and foreign direct investment (FDI) announcements and delayed action.
A 2025 Reshoring Initiative Report Preview projected that approximately 240,000 reshoring jobs were announced in 2025, down by about 7% from 2024. This is still a solid outcome given the policy uncertainty, the inevitable lag between policy changes and project announcements.
More announcements on deck
Many more reshoring and FDI announcements are on deck as companies await clarity on tariff policy. Current Reshoring Initiative data does not include many of the reshoring and FDI projects cited by President Trump as $21 trillion and restated by Bloomberg as $7 trillion. These projects largely reflect companies in a “pending” posture—developing plans for U.S. reshoring or FDI that they intend to activate if/when tariff structures become firm and predictable.
Tariff complexity
U.S. manufacturing activity slipped to a 14-month low in December with falling new orders and high-input costs continuing a trend of uncertainty and weakness. Yale Budget Lab estimated the administration’s trade policy has raised the average tariff on imports to 17% up from 3% YOY.
Manufacturers are reducing orders for inputs and raw materials due to the uncertainty. Many manufacturers have indicated that the constantly shifting tariffs are making it impossible to strategize and proceed with large investment decisions. Companies need stability for multi-year planning for building new facilities and establishing supply chains.
A better proposal
The strong U.S. dollar poses significant challenges to domestic manufacturing and reshoring efforts. The USD is overvalued 20% vs. developed countries and 100% vs. China and other EM countries. Reshoring decisions respond better to cost competitiveness and predictability than to trade barriers and uncertainty. An approach that avoids an excessively strong USD will support domestic reshoring and supply chain resilience better than a tariff-based approach.
A firm, long-term tariff is much better than no action at all to address our cost competitiveness problem. However, a 20% lower USD, reversing some or all of the USD’s overvaluation against developed countries plus a 25% tariff on China, is preferred, since it reduces imports and increases exports. Tariff uncertainty does the opposite.
I offer a better proposition: A lower USD as opposed to tariffs to improve U.S. manufacturing competitiveness and incentivize reshoring. A policy that encourages a lower U.S. dollar offers, vs. tariffs, a more effective, efficient and sustainable strategy to reshoring.
MAC and a competitive U.S. dollar
Dr. John Hansen, a former economic adviser at the World Bank, developed the MAC financial mechanism to restore a competitive dollar. A more competitively valued dollar will restore global competitiveness to American factories, reduce our growing dependence on imported goods, generate billions of dollars and accelerate economic growth by eliminating the negative effects of the current trade deficit that reduces our GDP growth rate.
The Market Access Charge
The Market Access Charge, or MAC, is a small variable tax on all foreign capital inflows into U.S. financial markets. It is a financial mechanism designed to address the U.S. trade deficit and currency valuation issues.
This tax, perhaps 1% 1x on each transaction, is designed to correct trade imbalances and accomplish four key goals: increase exports; reduce imports; encourage FDI in U.S. factories instead of in U.S. financial assets; and generate revenue for infrastructure and workforce training. The Reshoring Initiative supports MAC as a solution.
The U.S. 250th anniversary
The U.S. will celebrate its 250th anniversary in 2026. As we contemplate the Declaration of Independence, we are reminded of the nation’s foundational ideals rooted in freedom, self-reliance, equality and human potential. Those ideals are essential to a healthy domestic manufacturing industry and manufacturing is essential to our American identity and economic and national security. We believe a more competitive dollar, targeted industrial policies and skilled workforce development is a comprehensive solution to support and expand America’s domestic manufacturing industry.
Harry Moser is founder and president of Reshoring Initiative.
