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Localized Automation Becomes a Tariff Storm Safe Haven, but U.S. Smart Factory Build-Out Costs Far Exceed China’s
May 9, 2025 | TrendForceEstimated reading time: 2 minutes
TrendForce’s latest “Human-Machine Technology Report” points out that although the 90-day delay on the U.S. reciprocal tariffs announced by the Trump administration in early April 2025 offers temporary relief, it has already triggered lasting shifts in global manufacturing and supply chain strategies. The post-pandemic landscape and geopolitical tensions had already prompted a move away from long, global supply chains toward shorter, regionalized models. The added uncertainty of tariffs is now forcing companies to reassess manufacturing footprints and supply risks as they accelerate the search for resilient strategies.
TrendForce notes that the core objective of reciprocal tariffs is to increase import costs and encourage reshoring to the U.S. or nearby regions. However, with high labor costs and ongoing labor shortages, maintaining profitability and efficiency will require manufacturers—especially those in critical sectors like automotive, semiconductors, and electronics with U.S. or Mexico-based operations—to adopt smart manufacturing and advanced automation at a faster pace.
An analysis of the World Economic Forum’s “Lighthouse Factory” list—highlighting highly automated and intelligent manufacturing sites—shows that over 40% of the 189 designated sites are located in China, with electronics, appliances, industrial equipment, and food processing as the main sectors. Walmart’s recent announcement to absorb tariffs on Chinese imports reflects China’s continued advantages in manufacturing cost and supply chain density.
Additionally, China accounted for more than half of the world’s newly installed industrial robots in recent years, underscoring its maturity in both industrial technology and infrastructure and giving it a significant cost advantage in smart factory deployment.
In contrast, North America (including the U.S. and Mexico) accounts for just 7% of global lighthouse factories, indicating significant room for growth in Industry 4.0 adoption. While the U.S. lacks competitiveness in labor costs, it does lead in innovation areas such as 5G-native factories, AI-driven predictive maintenance, and digital twin technology. As such, reshoring efforts are expected to prioritize scaling advanced manufacturing technologies to empower key industries.
Notably, human-centric robotics products from Tesla, Boston Dynamics, and Agility Robotics are being developed specifically for factory use, offering a potential solution to workforce shortages. However, the high cost of deployment—further exacerbated by tariffs on imported components—may hinder their widespread adoption.
The push for domestic automation is not only driving companies to reduce dependence on China but also accelerating process optimization through software and hardware upgrades. In this environment, large manufacturers are increasingly willing to invest in long-term, high-end automation to offset labor market volatility.
This trend is benefiting demand for advanced industrial robots like six-axis arms, dual-arm collaboratives, AI vision-guided systems, and even humanoid robots. Nobel laureate Daron Acemoglu has also emphasized that AI and robotics are essential to reshoring U.S. supply chains, as they can replace labor and handle heterogeneous tasks. Furthermore, in high-wage environments, automation investments offer faster returns, encouraging faster R&D and deployment cycles among major manufacturers.
Overall, while uncertain tariff risks may accelerate U.S. manufacturing localization and automation upgrades, small and medium-sized manufacturers (SMEs) could face significant hurdles. Many rely on low-cost imports from China, including critical parts and finished automation systems now facing steep reciprocal tariffs. This raises the barrier to adopting automation and leaves SMEs grappling with both rising costs and unstable supply chains—posing a double bind between operational viability and transformation.
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From Factory Floor to ‘The Component Store’
07/25/2025 | Marcy LaRont, I-Connect007Daniel Beauvois began his career in PCB manufacturing 15 years ago with zero industry experience—just a willingness to learn. Daniel immersed himself in every step of circuit board production, from hanging out on the factory floor to giving plant tours. Now, as founder of The Component Store, he’s an independent sales rep known for integrity, persistence, and deep technical knowledge. In this interview, Daniel reflects on his journey, the realities of being an outside rep, and what it takes to earn—and keep—a customer’s trust in an ever-evolving electronics industry.
Würth Elektronik Opens New Location in South Africa
07/24/2025 | Würth ElektronikOn June 1, 2025, a new Würth Elektronik branch opened in Brackenfell, Western Cape, South Africa. The location operates under the name Wurth Electronics South Africa (Pty.) Ltd and will serve local customers, but will also be responsible for the markets of Botswana, Mauritius, Namibia, Tanzania and Zambia.
Hungarian EMS Provider VIDEOTON Group Acquires Stake in Limtronik
07/23/2025 | VideotonVIDEOTON is a privately owned, family-run Hungarian contract manufacturer. As one of the top EU-based companies in this sector, VIDEOTON offers comprehensive electronic manufacturing services (EMS).
Cicor Grows Double-Digit Again and Creates Strong Foundation for Further Expansion
07/23/2025 | Cicor Technologies Ltd.In the first half of 2025, Cicor Group took a significant step towards its ambition of becoming the pan-European leader in its chosen markets as announced in the strategy 2028, expanding market presence into France and Spain.
Hon Hai Earns ISO 37301 Compliance Management System Certification
07/23/2025 | Hon Hai Precision Industry Co., Ltd.Hon Hai Technology Group, the world’s largest technology manufacturing platform service provider, announced that Hon Hai Precision Industry Co., Ltd. and Hon Hai Semiconductor Manufacturing Co., Ltd. have officially passed the ISO 37301 compliance management system international certification issued by the British Standards Institution (BSI ).