Part 1: The Great Reshoring - From "Cheapest" to "Safest"
"Speak softly and carry a big stick."- Theodore Roosevelt
Global commerce is shifting. For decades, the formula was simple: make it where labor is cheapest, ship it where consumers can pay the most. That era is ending. Supply-chain fragility, geopolitical tensions, and a new era of U.S. industrial policy are moving production from "cheapest" to "safest."
This change isn't new. Geopolitical strategist Peter Zeihan notes that the unraveling of global manufacturing dependencies began in the early 2000s — under both Republican and Democratic administrations. What we're witnessing now is the acceleration of a trend two decades in the making.1
The historical precedent is striking. As venture capitalist Marc Andreessen observes, this pattern traces back to Alexander Hamilton's original "American system"—the strategic framework that transformed America from farmland into an industrial power. Hamilton's vision triumphed over Jefferson's rural agricultural model, establishing the blueprint for American industrial supremacy.
Between 1870 and 1920, this system delivered economic grow that "3x the current growth rate," while the subsequent era from 1920 to 1970 maintained growth" 2x the rate we have now." Then, around 1971,"the U.S. economy permanently downshifted its growth rate"—a decline that coincided with the shift toward deindustrialization and financialization.2
McKinley's presidency, occurring during the Second Industrial Revolution, exemplifies the strategic use of trade policy. Initially protectionist to build domestic industrial capacity, McKinley evolved toward what he called "reciprocity"—using American tariffs as leverage to secure global free trade agreements. This approach enabled American manufacturers to dominate both domestic and international markets. As Andreessen notes, "China's basically been running the American system playbook" today, using the same combination of domestic protection and export promotion that made America an industrial superpower.2
In geoeconomic terms, Michael Every often asks: "What's GDP for?" His answer—use America's $30.3 trillion GDP as both carrot and stick to reduce reliance on non-allies and deepen ties with strategic. Such neo-mercantilist economic statecraft may sound inconceivable to those accustomed to US/global free trade, but it reflects the reality that economic policy has always been an extension of strategic competition."3
Today's industrial map reflects this logic. Fortress North America—everything north of the Panama Canal, plus allied nations—represents a strategic bulwark against authoritarian competitors. President Trump's tariff policy embodies this geoeconomic approach: bilateral trade deals designed to rebalance commerce while securing strategic wins on intellectual property, supply chain security, and domestic investment. It's also a preview of next year's USMCA renegotiations.
The goal is threefold:
- reduce dependencies on rivals,
- deepen integration with allies, and
- lock strategic aims into durable trade frameworks.
At the center of this strategy lies investment in physical capital—factories and infrastructure that anchor communities, generate steady tax revenue, and stay rooted for decades. New federal incentives including Investment Tax Credits, Opportunity Zones, accelerated depreciation, and streamlined regulations make these investments more attractive than ever.However, forget your parents' factory. The modern industrial facility—what Elon Musk calls the "Alien Dreadnought"—has arrived: AI-powered, ultra-automated, and hyper-efficient. Fewer workers on the floor, but more skilled and better compensated, driving higher wages, stronger tax bases, and resilient local supply chains.
The winners in this new era will be those who act now—building capacity that delivers resilience, competitive advantage, and strategic positioning for the decades ahead. As Andreessen emphasizes, "These are choices. These are policy choices"—and the window for optimal positioning won't remain open indefinitely.2
Next month in Part 2: We'll explore the "Alien Dreadnought" phenomenon and examine how AI- powered automation is redefining manufacturing economics within Fortress North America.
