The Shift from Globalization to Regionalization and Reshoring

Friday, January 27, 2023 10:40 am EST

This year marks the 21st anniversary of the Mendoza College of Business signature lecture series, Ten Years Hence. We invite you to join with us to see and hear a variety of experts talk about this year’s topic, framed around a question: “Is Globalism Dead?”

Some of our speakers will say the answer is “yes,” while others will say, “definitely not.” Still others aren’t so sure, offering a qualified, “perhaps.” Beginning Friday, January 27, 2023, Harry Moser, joined us to speak on “The Shift from Globalization to Regionalization and Reshoring.” Experience the series virtually with 75 current Notre Dame students in Jordan Auditorium for a session that promises to be engaging, informative, and fun.

Join us on select Friday mornings throughout the spring semester to learn more about the global economy and a range of related issues such as global health concerns, migration, global governance, and the intersection of public policy and the public good.

Speaker:

Harry Moser, Founder of The Reshoring Initiative, Member Commerce Department Investment Advisory Council

The first event in the 2023 Ten Years Hence lecture series Is Globalism Dead on ThinkND featured Harry Moser, Founder of the Reshoring Initiative and Member of the Department of Commerce Investment Advisory Council. In this talk, Moser discussed the United States’ role in globalization, concerns about American business and employment, and broader impacts of onshoring on economic equality, the environment, and more. Following the formal presentation, O’Rourke and Moser answered questions from the student audience.

Moser began the conversation by connecting his forthcoming discussion to his personal experiences, explaining how the rise of imported goods into the United States eliminated the factories and jobs to which his ancestors, including his father and grandfather, dedicated their lives. Referencing the historical research of Ray Dalio, Moser observed the rise and fall of great economic empires and provided evidence suggesting the current decline of the United States that will soon be replaced by China as the leader of the world order. The United States no longer prioritizes competition, low manufacturing costs, and innovation, leading companies to offshore labor and production in order to prioritize price. The U.S. has a trade surplus — more imports than exports– and produces raw materials and commodities, aligning more with the character of a developing country than a global economic leader. Additionally, the United States invests less on boosting productivity and instead continues to accrue debts and trillion dollar deficits, condemning the nation to a declining role in world trade. However, despite these concerns internally within the United States, China’s position as global leader is not certain given their declining supply of labor, increasing wage rates, and aging population.

Moser emphasized that hoping for China’s economy to stall is not a sufficient solution to the decline of the United States. Instead, he recommended reshoring as a means to target the economy’s lack of competitiveness, productivity, and income growth to bring more equality to the hollowed-out middle class and more opportunities for employees in all sectors. Additionally, reshoring manufacturing will have positive effects on the environment and thus the future of climate-based business processes. Localization and/or nearshoring operations will resolve the losses made in past decades by outsourcing many aspects of production.

Being economically self-sufficient, or simply more independent that it currently is, will help the United States avoid disruptions that can be damaging to both workers and consumers. Natural disasters, governmental crises, etc. can limit the amount of products US-based companies can sell, can impact costs and prices without much control or notice, and can be damaging if international agreements are suspended. In other words, there is higher economic risk when companies offshore elements essential to their business operations. Companies’ overall costs can be lower when manufacturing is done on American soil or that of neighboring countries, especially once the costs of tariffs and mitigants are considered in full. Additionally, Moser echoed the Business Roundtable in emphasizing the responsibility corporations have not only to shareholders but to all stakeholders including communities, employees, and suppliers. Investing in companies that will greatly benefit from reshoring is a smart decision to benefit investors and the corporations themselves, all while on a macro level boosting the US economy. There are also price advantages to be gained from investing in a skilled American workforce, implementing a lower corporate tax rate, and more– all governmental initiatives– to encourage bringing jobs back to the United States. However, beyond Wall Street investment and government involvement, it is also the responsibility of companies to secure reshoring opportunities including the Import Substitution Program or total cost of ownership system.

To conclude his presentation, Moser answered questions from students in the audience about tariffs, free trade rules, investment in other countries including education and training, incentives available to corporations, and more.

Visit the event page for more.

China will soon replace the United States as leader of the world order due to their commitment to education, innovation, and competition. (12:20)
Accelerating reshoring will address some of the driving forces of the United States’ decline including inventiveness, optimization of processes, and training and education. (22:30)
The COVID-19 pandemic helped make clear the dependencies and lack of self-sufficiency within the United States economy that were slowing our productivity. (30:51)
In alignment with Business Roundtable’s pivot to prioritize all stakeholders beyond those investing in shares of the company, American companies should bring work back to the United States in order to better benefit communities, employees, suppliers, and the environment. (42:42)
Investment firms, government agencies, and corporations themselves are responsible for and have the means to promote reshoring by bringing jobs back to the United States (in goods and services economies) and sourcing raw materials from local suppliers. (50:14)

“[The United States] has more imports than exports. But when you look and see where we’re weak, it’s cars, it’s computers, it’s cell phones, it’s vaccines, it’s technical things, electronics, things like that. And you look where we’re strong and, except primarily for airplanes, it’s commodities, it’s soybeans, it’s corn, it’s oil and gold and things like that. So in many ways, the trade profile of the U.S. is more what you would expect from a third world or developing country than you would from the leading technical, industrial, guarantor of peace.” (Harry Moser, 14:45)
“The reality is the US has done a horrible job of increasing its productivity and you need productivity to stay competitive.” (Harry Moser, 17:05)
“But hoping for things to happen in China is not a plan. You’re going to hear this from your bosses throughout life. When you say, I hope it’s going to work, I say no. Hope is not a plan. Doing something is a plan.” (Harry Moser, 22:09)
“Our biggest message to companies is to do the math. Don’t make your decisions just based on price, but instead, consider all the costs, all the risks, all the implications for you, and to some extent, for your country and community.” (Harry Moser, 39:12)
“One reason the US and China are having such a hard time is that the US feels defensive. We feel back on our heels, so to speak, relative to that rising potential hegemony to the up and coming tough guy on the block. And to the extent that the US is strong and confident, I believe we can deal more flexibly with China, and the prospects for world peace will be greater with a strong US economy than with a weak U.S. economy.” (Harry Moser, 52:50)