The Chinese character for crisis means “danger” and “opportunity,” and tariffs have created a supply chain crisis throughout the United States. Paul Roberts of the Seattle Times reports that fewer ships are arriving in Seattle: “Fewer ships coming into the U.S. means companies can’t get components. Retailers and consumers can’t get products.” Regardless of whether one agrees with the tariffs, the die has been cast.

This is far from the first time the United States has had to step up to a crisis, as we did when we led the world to victory during World War II. Likewise, Japan helped meet the Covid-19 challenge when a plant had to multiply its output of protective garments a hundredfold without adding people or significant capital investment. Manufacturers have the means readily at hand to deal with this latest crisis. All we need is the will to use it.

Tariffs are only the latest symptom of long-standing supply chain problems that arose from the offshoring of American manufacturing capability in the first place. As Zach Mottl, chair of Coalition for a Prosperous America, wrote, “For decades, Wall Street has rewarded corporations for offshoring American jobs.” If tariffs serve as a wake-up call that results in reshoring manufacturing, and shortening supply chains in general, they may result in a favorable outcome.

Of course, numerous other issues have threatened international supply chains besides tariffs, and all threaten continuity of operations as well as higher supply chain costs. All can be addressed by reshoring manufacturing, a subject that Harry Moser’s Reshoring Initiative has discussed for a long time.

Houthi pirates have forced ships to circumnavigate Africa, which adds shipping costs and lead time while negating the specific purpose for which the Suez Canal was built. A ship that got stuck in the canal had a similar effect.

Falling water levels in the Gatun Reservoir have increased waiting times to transit the Panama Canal.

Strikes have threatened the supply chain, as when International Longshoremen’s Association head Harold Daggett said, “I will cripple you,” in the context of the nation’s dependency on everything that comes in on ships, including construction materials, steel, and lumber.

Detention time at ports means truck drivers must often wait for hours, sometimes without pay, to pick up or deliver their cargoes at seaports. This is unfair to the drivers and adds lead time to the supply chain. The purchaser must meanwhile wait for its container to be unloaded from the ship and hope the contents arrive in time, and also meet specifications. This is why companies carry warehouses full of protective inventory so their operations don’t stop if the items don’t show up when they are needed or are nonconforming. Remember that inventory, one of Toyota’s Seven Wastes, is directly proportional to lead time.

The United States is currently dependent on China, a hostile geopolitical rival, for consumer goods, pharmaceutical products, electronics, rare earths, and more. We depend on Taiwan, which China has threatened to invade, for many semiconductor products. The sooner China is out of our supply chains, the better off we will be.

Apart from supply chain issues, there is the issue of fake or unregulated products. Domestic suppliers have an incentive to deliver good quality; they are within easy reach of American courts. If a fly-by-night offshore supplier puts fake markings on semiconductor products and causes millions of dollars in damage or product recalls, we’re not going to have much luck finding that supplier, much less holding it accountable.

An off-the-shelf solution

The good news is that the United States already has at hand the solution it applied during World War II. The war compelled us to expand our manufacturing capability enormously with the aid of the methods that Henry Ford, Frederick Winslow Taylor, Frank Gilbreth, and others developed during the first part of the century. We need do little more than examine the success of what we did more than 80 years ago and put the same knowledge to work today.

China has cheap labor in abundance. Henry Ford wrote in My Life and Work (Doubleday, Page & Co., 1922) that businesses should “overcome by management what other people try to overcome by wage reduction” or, by implication, shipping jobs offshore for cheap labor. He achieved this to the extent that, by World War II, one American was three times as productive as the average German, and nine times as productive as the average Japanese (Jon Miller, “Gemba Keiei Chapter 17: The Goal—Improve Productivity Ten-Fold,” Gemba Academy, 2018).

“Mobilizing for War” (UConn Library, University of Connecticut) is an excellent overview of how the United States met the wartime challenge of making everything we and our allies needed despite interference by the Japanese Navy and German submarines. The key takeaway is that if we couldn’t import what we needed, we found substitutes for it. When the war in the Pacific cut off our natural rubber supplies, we developed synthetic rubber that was actually better. Henry Ford extracted the valuable chemicals from coal before he used the remaining coke in blast furnaces. The United States has deposits of rare earths. We need to process them domestically to avoid dependence on China.

When industrialists complain about a shortage of skilled labor, we need remind them only of the fact that, prior to World War II, not many American women worked outside their homes. “Rosie the Riveter” nonetheless learned a factory job very quickly and became a machinist, shipfitter, or other skilled worker. There are plenty of retired machinists and trade workers who would probably like to do something part-time, such as train new workers, and we should be willing to pay them substantial wages to do this.

If our society decides we must absolutely recover our manufacturing supremacy, we can certainly do it. The only barrier is lack of will rather than lack of technology or the efficiency methods our country developed more than 100 years ago.