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Tariffs are supposed to promote domestic investments, but transitioning supply chains could take years
Tariffs are supposed to promote domestic investments, but transitioning supply chains could take years
Tariffs are supposed to promote domestic investments, but transitioning supply chains could take years

Published on: 05/15/2025

Description

Honda is among the latest major companies to announce it's shifting its production to the U.S. The carmaker announced it will move production of its CR-V from Canada to the U.S. because of tariffs.

Honda isn't alone as companies aim to relocate supply chains and infrastructure to the U.S. amid growing concerns about the cost of importing goods from abroad due to President Donald Trump's tariffs.

Hyundai recently announced a $21 billion investment in U.S. growth from 2025 to 2028, and Stellantis announced it will invest more than $5 billion in the U.S.

Computer and technology companies are making major moves, too.

Apple and Nvidia each announced $500 billion commitments to U.S. manufacturing and infrastructure. Apple said it will spend the money over the next four years and plans to build a new plant in Texas. Nvidia is committed to building AI servers domestically.

Medical research companies including Abbott Laboratories, Merck and Roche have also announced major U.S. investments.

The Trump administration touts "trillions of dollars of investments" on the White House website.

RELATED STORY | Trump tariffs aimed at reviving US jobs, but experts warn of complex challenges

Those commitments are the result of "political pressure," and might not come to fruition, according to supply chain expert Kimberly Reuter.

"Thirty percent or less (of the companies) are going to actually follow through with the full intent of what they've announced," Reuter said. "They're going to fall into a situation where it's just more complex and more difficult than they've even planned for."

Experts told Scripps News the reality of relocating supply chains is complicated and will not happen quickly.

"It will take five years for us to have meaningful manufacturing here in the United States," Reuter said. "It would take 10 years plus for us be able to compete at the level of China."

While transitioning supply chains due to the tariffs could create more jobs, it could eliminate even more.

In a note last month, Goldman Sachs estimated the tariffs could create 100,000 manufacturing jobs but likely cause 500,000 jobs across other industries to be lost.

News Source : https://www.kbzk.com/politics/economy/tariffs-are-supposed-to-promote-domestic-investments-but-transitioning-supply-chains-could-take-years

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