In 2018, when "America First" was first written into trade policy, many assumed American-made goods would soon reclaim store shelves. Eight years later, tariffs have climbed from 25% to 35%, 50%, and even 145%—yet walk into Walmart, Costco, or Target, flip over any product tag, and "Made in China" is still everywhere.
Some say it's because they're "cheap." But the truth is: it's not that Americans don't want to switch—it's that they can't.
A June 2026 report from Morgan Stanley delivered a resounding rebuttal to the "manufacturing reshoring" narrative.
The report found that more than a year after the Trump administration launched its so-called "Liberation Day" tariffs, the U.S. economy's reliance on imports has not declined—it has continued to rise.
The numbers are striking:
Overall import penetration across all U.S. goods rose from 32.8% to 33.6% in December 2025
Import penetration for durable consumer goods climbed from 42.7% to 43.5%
U.S. GDP grew by approximately $100 billion in 2025, yet imports increased by **$150 billion**
Morgan Stanley delivered a sobering conclusion: supply chains are undergoing far more "reconfiguration" than "reshoring" —companies have simply shifted their import sources, rather than moving production back to the U.S.
The steel industry is a classic case. After the U.S. imposed a 50% tariff on steel imports, imports plunged 30.1% and domestic production rose 6%. But at what cost? U.S. steel prices are now double those in China and 50% higher than in Europe. Manufacturing reshoring? No—manufacturing is being crushed by costs.
Reason One: Erratic Tariff Policy—Who Would Invest?
The Financial Times reported on the real-life ordeal of GE Appliances. After being acquired by Haier in 2016, the company invested over $3.5 billion over a decade, aiming to move dishwasher component production from China back to Kentucky. They ordered multi-process production equipment from New Zealand—which has still not been delivered.
To make matters worse, the Trump administration imposed a 25% tariff on machinery and equipment, driving equipment procurement costs up by $1 million—completely eliminating the economic viability of the "reshoring" plan. CEO Nolan said: "We had no idea equipment prices would go up by $1 million. The current tariff policy is practically punitive—businesses simply have no surplus capital left for reinvestment."
Over the past six months, tariff rules applicable to home appliance products have changed five times. How can a manufacturing company—whose investment decisions look 20 to 30 years ahead—dare to build a factory in such an environment?
Reason Two: Slow Approvals, Labor Shortages—America Is Blocking Itself
Even when companies are determined to reshore, America's internal barriers are daunting.
According to the National Association of Manufacturers, regulatory approval delays across all levels of government cost the manufacturing sector an average of $7.9 billion annually. When Panasonic built a battery plant in Nevada, annual employee turnover once exceeded 100%. When building a second plant in Kansas, the company only proceeded after local government and community colleges committed to helping train workers. A Panasonic executive admitted: "We learned the hard way that we must plan thoroughly before breaking ground."
Gene Seroka, Executive Director of the Port of Los Angeles, put it even more bluntly: "China has been building its supply chain experience for 45 to 50 years. That capability cannot be replicated overnight."
Reason Three: China's Manufacturing Advantage Is "Ecosystem-Level"—Not Just a Factory Issue
2025 global market share data provides powerful evidence: among 67 major goods and service categories, China holds the largest global share in 19 categories—up by one from 2024—while the U.S. fell from 27 to 23.
The humanoid robotics sector is an extreme example: Chinese companies hold 63% of the global share. Approximately 70% of Tesla's Optimus robot core components come from Chinese suppliers. If Chinese parts were removed, the per-unit cost of Optimus would skyrocket from $46,000 to $131,000.
This is no longer about being "cheap"—it's about having no alternative source at all.
When tariffs were imposed, U.S. consumers went into "panic buying" mode—Chinese goods at supermarkets were cleared off shelves.
U.S. retail dependence on "Made in China" is staggering: 70% of Amazon's merchandise is made in China; 60% for Walmart; approximately 30% for Target; and about 30%–35% for Best Buy. Walmart's 2027 procurement plan lists Asian food as one of its five top priority categories, including prepared meals, clean-label foods, and spicy items.
In the seasoning sector, mainland China exported a staggering 3,578 tons of soy sauce to the U.S. in a single month (October 2024)—four times Thailand's volume and eight times Japan's. Chinese seasonings dominate the U.S. Asian seasoning market with a structural advantage that will be difficult to disrupt in the short term.
Don't fantasize about "de-Chinafication": In 2026, even with tariffs as high as 145%, Chinese companies—by expanding into other markets—still posted a trade surplus of approximately $1.2 trillion. Chinese companies are continuing to serve the U.S. market through overseas factories (Vietnam, Mexico, etc.).
Compliance is a prerequisite, not a barrier: Some leading Chinese suppliers have already made it onto the FDA's "Green List" (e.g., Yili has 5 FDA "exempt from routine inspection" factories). Choosing compliant suppliers is far more reliable than blindly "switching sources."
Do the math: No matter how high tariffs go, if the U.S. simply doesn't produce what you need, you will still have to import it.
"America First" has been shouted for eight years, yet store shelves are still full of Chinese goods. It's not that Americans don't want to switch—it's that the fundamental logic of industrial chains cannot be rewritten so easily. Market laws don't care about slogans—they care about who can supply reliably, who can control costs, and who can sustain a nation's consumer demand.
