As tensions between the United States and China continue reshaping the global economy, economists and policymakers are increasingly focusing on a new concept that could define the next era of international trade: “friendshoring”.
Rather than bringing manufacturing fully back home, countries and multinational corporations may instead shift production and investment toward politically friendly nations.
A new analysis published by The Conversation argues that friendshoring may allow globalization to continue in a different form, even as trade between the world’s two largest economies becomes more strained.
The article notes that trade and investment between the US and China have both weakened in recent years, particularly in sectors where the US had become heavily dependent on Chinese manufacturing.
Between 2017 and 2023, American imports declined most sharply in products such as industrial machinery, computers and electronic equipment.
At the center of this shift are global value chains – the international production networks that distribute manufacturing, assembly, research and supply operations across multiple countries.
The article says industrialized economies now face two broad choices: reshoring or friendshoring.
Reshoring involves bringing manufacturing back into domestic economies, something strongly encouraged by US President Donald Trump and increasingly supported across parts of Washington.
Friendshoring, by contrast, involves redirecting manufacturing and investment toward countries viewed as politically reliable partners.
The analysis suggests the second approach may become more practical and economically sustainable than fully rebuilding manufacturing inside advanced economies.
“For consumers worldwide, friendshoring offers a more benign outlook than reshoring or tariffs,” the article said. “Goods may simply be made in different countries, with prices remaining broadly stable.”
The article argues that some countries are already benefiting from the trend.
Vietnam, Thailand, Malaysia and Indonesia have reportedly attracted growing investment in high-tech manufacturing sectors including computers and electronics, while Mexico has benefited from automotive-sector expansion tied to North American supply chains.
India and Bangladesh are also emerging as potential beneficiaries in both higher-tech and lower-cost manufacturing sectors.
At the same time, the analysis warns that automation and digitization are making it easier for wealthier countries to bring some manufacturing back home, potentially threatening jobs and investment in parts of the developing world.
The article identifies semiconductors as one of the clearest examples of active US reshoring efforts.
Still, researchers argue that large-scale reshoring remains difficult and expensive in many industries.
“Friendshoring could offset or even exceed potential losses, offering new pathways for industrialisation,” the article stated.
The analysis also suggests globalization itself is unlikely to disappear despite rising geopolitical tensions.
“In this sense, globalisation will not disappear,” the article concluded. “But it will take on a different geographical shape.”
Leave a Reply