The Supply Chain Illusion: Why 'Reshoring' Is Not Happening
May 10, 2026 · Frisian News
Western governments and corporations promise to bring manufacturing home, but the numbers reveal a different story. Factory jobs remain overseas while costs and politics keep reshoring a distant dream.
A major Dutch electronics manufacturer announced with great fanfare that it would open a new factory in Romania, a move executives called a 'reshoring initiative' for Eastern Europe. The reality proved far simpler. The company was not returning production from Asia. It was opening a new facility to serve existing operations already based there, paying workers roughly one-third what it would cost in the Netherlands. This pattern repeats across Europe and America, where politicians trumpet reshoring commitments while companies quietly build factories wherever labor remains cheapest.
The reshoring narrative gripped Western policymakers after the pandemic exposed fragile supply chains and the Ukraine war disrupted gas supplies to German factories. Both the European Union and United States promised to rebuild local manufacturing capacity. Europe launched billions in subsidy schemes. America's Inflation Reduction Act dangled tax credits for domestic production. Yet five years later, global supply chains look much as they did before. China remains the manufacturing hub. Vietnam and India have grown faster than most European nations in factory output.
Why does reshoring fail despite government money and corporate promises? Cost remains brutal and honest. A worker in Vietnam costs far less per hour in wages and benefits. The same worker in Germany or the Netherlands costs 35 to 40 dollars. Even with subsidies, no amount of green paint and talk of 'strategic autonomy' closes a gap that wide. Automation helps, but it replaces workers rather than creating the stable manufacturing jobs politicians promised to voters.
Companies also learned they do not need factories on European soil to serve European customers. They now use rapid shipping and flexible supply routes. A container from Shanghai reaches Rotterdam in 30 days. The just-in-time systems of the 1990s have given way to just-in-case stockpiling scattered across multiple continents. This approach costs more but spreads risk. It also keeps production costs low, which matters far more to shareholders than national pride or supply chain resilience.
The reshoring story serves a political function. It allows governments to claim they are rebuilding their industrial base while writing checks that actually support companies offshoring to cheaper regions. Citizens hear about new factories and job growth. They rarely see the fine print revealing that the jobs are temporary, the wages low, and the factories themselves will close within a decade when subsidies run dry. Supply chains have not returned home. They have simply become more honest about where value actually moves.
Published May 10, 2026 · Frisian News