Just recently, the Trump administration in the United States has repeatedly imposed tariffs on China, with total tariffs on Chinese exports to the U.S. now reaching 145%. Many Chinese commentators have pointed out that this move is aimed at reviving American manufacturing. indeed, the Trump administration has made no attempt to hide this goal, openly stating that even if it means the country must swallow the bitter pills to bring manufacturing back. That being said, many Chinese analysts remain generally do not see a good probability of the revitalization of American manufacturing.

Industry insiders have observed that many in China hold a rather bleak view of the current state and future outlook of American manufacturing. They believe that the country’s manufacturing has been hollowed out to the point where it’s nearly nonexistent. What remains is only a limited number of industries with higher technological content and added value, while the overall industrial system is severely fragmented. Since the beginning of the 21st century, U.S. manufacturing has been in decline and has continued to shrink, with reshoring efforts yielding little effect.

Trump has never concealed his intention to bring back American manufacturing. This has, as a matter of fact, become a widely accepted issue within American society. Even the Democratic Party does not oppose the return of manufacturing, and the country’s powerful labor unions are strongly supportive. An objective evaluation of the real state of U.S. manufacturing is one of the key factors in judging the effectiveness of Trump’s tariff strategy and also provides important reference for China’s future countermeasures. With that in mind, it is crucial to understand if American manufacturing truly as fragile as some have suggested. The facts may tell a different story.

First of all, the strength of American manufacturing remains formidable. There is no doubt that China is the world's number one manufacturing powerhouse. However, if one were to ask who holds second place, the answers become less clear: some would point at Japan, others believe it would be Germany. Yet, few would consider the U.S.; many now view the U.S. as a country where the virtual economy has bloated and manufacturing has been entirely hollowed out. This perception is highly rather misleading.

According to World Bank data, in 2022, China's manufacturing value added accounted for as much as 30% of global manufacturing output. The second place went to the U.S., with a 17% share, which further increased to 17.6% in 2023. By contrast, the combination of the shares of some countries, often perceived as “manufacturing powerhouses”, such as Japan (6%), Germany (5%), and South Korea (3%), does not even match that of the U.S.

Looking at the changes in the global manufacturing landscape between 2011 and 2022, China’s share rose from 21% to 30%, while the U.S.’s share increased from 16% to 17%. In fact, the U.S. was the only major developed economy to see a rise in its share. China, as the country with the most significant progress in manufacturing over the past decades, has increased its share primarily at the expense of other developed nations. Japan’s share dropped from 10% to 6%, Germany's from 6% to 5%, France's from 3% to 2%, and Italy's from 3% to 2%. In other words, the bulk of China’s manufacturing gains came from taking over the share previously held by other developed countries (excluding the U.S.), while U.S. manufacturing still managed to grow amid fierce competition.

It is also worth noting that the value added of U.S. manufacturing is, to some extent, underestimated due to a strong tendency among American firms to deliberately lower their cost base. U.S. manufacturers frequently outsource certain production-related services such as finance, marketing, and management to third parties. If these were included under a broader measurement standard, research by the U.S. Department of Commerce suggests that the share of U.S. manufacturing value added would be higher. Accordingly, the U.S.’s global manufacturing share would increase even further.

Secondly, the structure of American manufacturing is far from being severely incomplete. Due to industrial relocation, the U.S. has indeed experienced hollowing out in low- and mid-end manufacturing, but it is by no means wiped out. According to non-farm employment statistics from the U.S. Department of Labor, as of January 2025, there were 12.76 million workers employed in the manufacturing sector. Labor-intensive industries such as textiles and furniture manufacturing still retain a certain scale domestically, even though they account for a small portion. Previously, ANBOUBD has highlighted a large-scale U.S. washing machine factory that operates efficiently and performs well. Even industries believed to be in decline, like garment manufacturing, still has a presence in the U.S. For example, American-made jeans are not only made with high-quality fabric but also boast excellent craftsmanship and durability. Despite being far more expensive than the cheaper Southeast Asian alternatives, they remain highly popular.

Moreover, industrial reconstruction in the U.S. is far from impossible. Take Fuyao Glass as an example. At the beginning of its U.S. factory operations, float glass, its primary raw material, was mainly imported from China. Today, however, it is almost entirely sourced locally within the U.S. While the profit margin at its U.S. plant was indeed lower, i.e, 9.93% in 2024 compared to the overall company margin of 19.12%, as long as the American factory remains profitable, the gap can be offset through tariff policy leverage.

It is worth noting that statistics from Guolian Securities show that among Chinese listed companies setting up factories overseas, the most frequently chosen location is the United States. With 272 companies, it significantly surpasses other countries. If the foundation of American manufacturing were truly that poor, the U.S. likely wouldn't be the top destination for overseas factory layouts by Chinese listed companies. Let me know if you want it to sound more formal, casual, or adjusted for a particular context!

Third, the decline of American manufacturing has already shown signs of reversal, and industrial reshoring policies have begun to take effect. During the first decade of the 21st century, the sector was indeed in continuous decline, with the number of workers dropping from 17.28 million in 2000 to 11.6 million in 2010. However, after the Obama administration launched the Framework for Revitalizing American Manufacturing in 2009 and proposed a "re-industrialization" strategy, this trend gradually reversed after 2010. American manufacturing output, employment, and global share have all re-entered a phase of steady growth. The most notable recovery has been in the automotive industry, where employment rose from 680,000 in 2011 to 1 million in 2023. This is likely a key reason why the Trump administration imposed a separate 25% tariff on automobiles; after all, reshoring is real, tangible, and effective.

According to statistics from the Reshoring Initiative, a nonprofit organization dedicated to promoting the return of manufacturing to the U.S., between 2010 and 2023, companies reshoring to the U.S. came primarily from China (24.6%), Japan (12.2%), Germany (12.8%), and South Korea (6%). In terms of jobs created, these countries accounted for 19.7%, 14.6%, 12.7%, and 10.5% respectively. Specifically, from 2010 to 2023, a total of 1,425 companies returned from China to the U.S., creating 210,000 new jobs. When it comes to the reshoring of U.S. manufacturing, ANBOUND has repeatedly emphasized the effectiveness of related policies in its ongoing research.

Perhaps the most important factor lies in the fundamental trend of the global production landscape being reshaped. ANBOUND has previously pointed out a view that has since gained widespread acceptance, that the era of globalization driven purely by economic factors such as production costs is undergoing a reversal. The global production layout has entered a phase of “close production” where key production and R&D hubs become the focal points of industrial planning. The U.S., as both a global center for R&D and one of the most critical consumer markets in the world, holds unparalleled advantages. In this new era of close production, these factors will play a crucial role in driving the revival of American manufacturing.

Lastly, there’s the factor of technology. The reshoring of American manufacturing is not simply about replicating factories. Instead, it often involves significant upgrades in technological equipment and automation. Furthermore, U.S. immigration policy itself remains largely unchanged; what is currently being controlled is mainly illegal immigration. In fact, in recent years, the number of immigrants from Eastern European countries with solid university educations has increased significantly. Taken together, these factors suggest that the future of American manufacturing is far from fragile. The Trump administration’s decisions were not made on a whim, and conservative American economists also wield significant influence, though they often receive less attention compared to progressive economists in universities, mainly due to the media being dominated by the Democratic Party. Their industrial policy planning deserves serious attention. The global manufacturing landscape is undergoing a structural reshuffle, and early adjustments will be essential to adapt to this new configuration.

Final analysis conclusion:

After more than thirty years of development, China’s manufacturing industry has made significant progress in both scale and technological strength. This has also been a key foundation for the country in withstanding multiple rounds of heavy tariffs imposed by the United States. However, given the long-term nature of economic competition between the U.S. and China, it would be unwise to underestimate American manufacturing.

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Zhou Chao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.