A.T. Kearney’s 2024 Reshoring Index (KRI) examines a U.S. market more reliant on goods made closer to home, continuing a trend over the past few years. The KRI increased significantly in 2023 as the ratio of Asian low-cost countries and regions (LCCRs) imports into the U.S. over domestic manufacturing gross output (MGO) declined.
Key findings of the KRI are shown below:
For the first time since 2013, Asian LCCRs other than mainland China saw a cut in imports. Vietnam and Malaysia imports were cut by 10% and 16% respectively. India, Thailand and Taiwan imports into the U.S. were relatively flat.
Total imports from Canada steadily rose over the past 3 years. Since COVID-19, Canada imports have kept pace with Asian LCCR imports. In 2023, Canadian exports to the U.S. rose across half of their export categories. Transportation equipment exports to the U.S. rose 30%.
For the first time since the initial 2013 Reshoring Index, Mexico passed China and is now the largest exporter to the U.S. U.S. imports of Mexican manufactured goods rose from $320 Billion to $422 Billion (32%), an increase of $102 Billion since pre-COVID.
There appears to be a correlation between rising U.S. imports from Asian LCCRs (excluding mainland China) and the imports those countries have from mainland China. For example, there was a 75% rise in Vietnam’s imports from China in 2022 versus 2018, while Vietnam has been one of the biggest winners in global changes for U.S. imports over that same time period.
Chinese exports to other U.S. importers have been rising steadily and China is now running trade surpluses with countries such as Vietnam, India and Thailand, which are running growing trade surpluses with the U.S. Chinese exports to other U.S. importers rose 26% in 2021 (from $715 Billion to $905 Billion) and 8% in 2022 (to $975 Billion).
U.S. companies and consumers are ramping up their “Buy American” habits. The U.S. self-sufficiency index gradually declined from 2013-2020, but started rising in 2021 and rose by 5% between 2022 and 2023.
U.S. investments remain strong but, while receiving significant support from the public/private sectors, U.S. domestic manufacturing still faces considerable hurdles, including a severe lack of skilled workers, labor costs and infrastructure challenges.
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Read More: https://www.kearney.com/service/operations-performance/us-reshoring-index