Morgan Stanley: Limited reshoring effect 1 years after tariffs
Morgan Stanley said that 1 years after the tariffs were implemented, evidence of companies broadly bringing production back to their home countries, or reshoring, remained limited. Tariffs triggered some price increases and supply-chain adjustments but did not lead to large-scale relocation of facilities.
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Morgan Stanley reported that even 1 years after the tariffs were implemented, reshoring of production had not occurred on a broad scale. This is important for assessing the impact of companies' supply-chain restructuring and cost structures on the market.
The bank assessed that tariffs had triggered price increases for some products and supply-chain adjustments, and said it had also observed cases in which companies passed costs on to consumers.
Many companies maintained their existing processes and trading relationships rather than fully relocating their supply chains, and said that large-scale facility investment remained limited.
Instead, companies were assessed as having responded through gradual adjustments such as diversifying production locations, adding suppliers, and localizing component sourcing.
It noted that small-scale relocations were observed in certain industries, but that a full-scale reshoring of manufacturing was rare.
The report pointed out that investment costs, labor costs, and regulatory risks were the main factors limiting relocations.
It reported that tariffs had some impact on corporate costs and consumer prices, and that the persistence of this impact depended on companies’ capital investments and changes to supply contracts.
Morgan Stanley concluded that it would be necessary to reassess the effects going forward while observing policy changes and companies’ long-term investment plans.
Sources: Investing.com News
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