- 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.
For further details see:
Inflation: The Demise Of Offshoring Has Been Greatly Exaggerated