ZIM - Inflation: The Demise Of Offshoring Has Been Greatly Exaggerated

• One factor behind the long disinflationary trend since the early 1990s has been offshoring of manufacturing, especially to China.
• Thus, it would seem to make sense that reshoring would produce an inflationary trend.
• This line of thinking is flawed for multiple reasons. In this article, we'll discuss one of these reasons: the reshoring revolution was thrown but no one showed up.
• Indeed, world trade volume is rebounding strongly, the US trade deficit is soaring, and dozens of chock-full container ships are waiting off the West Coast to dump their cheap merchandise into the US.
• Goods inflation should cool over time as this flood of cheap merchandise from Asia filters across the United States.

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