American car manufacturing giant General Motors is set to invest $4 billion in the United States, moving production of three vehicles from Mexico.

GM plans to move production of full-size SUVs and light-duty pickups from Mexico to its Orion Assembly Plant in Michigan, a plant that had recently been repurposed to focus on electric trucks until demand for EVs dropped, The Detroit News reported on Tuesday. GM’s gas-powered Equinox will be made in Fairfax, Kansas, and the gas-powered Blazer will be made in Spring Hill, Tennessee. The auto company’s major shift back is set to take place through 2027 and will move the assembly of more than two million vehicles to the United States, GM said, according to CNBC.

“We believe the future of transportation will be driven by American innovation and manufacturing expertise,” GM CEO Mary Barra said. “Today’s announcement demonstrates our ongoing commitment to build vehicles in the U.S. and to support American jobs. We’re focused on giving customers choice and offering a broad range of vehicles they love.”

The announcement, which comes after President Donald Trump imposed a 25% tariff on foreign auto imports, was celebrated by the Trump administration.

“No president has taken a stronger interest in reviving America’s once-great auto industry than President Trump, and GM’s investment announcement builds on trillions of dollars in other historic investment commitments to Make in America,” White House spokesman Kush Desai said, according to The Detroit News.

Michigan Democratic Gov. Gretchen Whitmer also praised GM’s decision, saying it would bring “more auto manufacturing back home to Michigan, protecting thousands of good-paying, union auto jobs.”

The future of the Ramos Arizpe plant in Mexico, which currently produces the Equinox and the Blazer, remains uncertain. The production of the Blazer is set to fully move to the United States, while some Equinoxes will still be made at the Mexico plant for other markets, CNBC reported.

Last month, GM said it was also cutting back on production at a truck plant in Ontario, Canada, due to Trump’s auto tariff, The Daily Wire previously reported. The auto giant said in April that it planned to ramp up production of light-duty trucks at its assembly plant in Fort Wayne, Indiana, which promises to add more temporary jobs and increase overtime opportunities for employees.

In April, President Trump imposed global reciprocal tariffs on the United States’ trading partners, invoking his authority under the International Emergency Economic Powers Act of 1977, to address the national emergency posed by the large and persistent trade deficit” driven by the lack of reciprocity in the country’s trade relationship.

President Trump also wanted to see jobs and factories come “roaring back” to the United States.

The idea that the United States can become a manufacturing powerhouse is an attractive one, to politicians on both sides of the aisle. After all, who would not be in favor of economic revitalization, new jobs, improved security, and economic independence? However, America’s ability to establish manufacturing dominance faces insurmountable challenges… unless we are smart about the industries we “bring home.”

Historically, the United States has never been a true manufacturing superpower.

Manufacturing employment in the United States peaked in 1979, with nearly 20 million workers employed in the “manufacturing sector.” Over the next four decades, manufacturing entered a structural decline, and the United States transitioned to a service-oriented economy. By 2020, “the service sector dominated the economy,” accounting for 79% of the nation’s Gross Domestic Product, up from 52% in 1950, and represented 80% of the nation’s total employment. In 2025, fewer than 13 million workers were in the manufacturing sector.

The challenges for the United States to become a manufacturing superpower are many and complex.

First, the country simply does not have the labor pool to do so. The unemployment rate in May 2025, the latest data available, was approximately 4.2%, near full employment.

The labor participation rate is running at 62.6%, which is well below the 67+ percent rate seen in the late 1990s and early 2000s, but not low enough to indicate there is a bench of workers waiting to enter the job market and join the manufacturing sector.

In addition, our labor force is one of the highest-paid in the world. In the United States, the average hourly wage of a “nonsupervisory manufacturing employee” is approximately $28.80. In 2020, that wage was approximately $6.50 per hour in China and $4.82 in Mexico. In Vietnam, the average hourly wage in manufacturing is $3.10.

We simply do not have the workers to compete with less developed nations, and those we do have make too much money to make America competitive with them.

The only answer would be to open our borders and import foreign workers to fill manufacturing openings at suppressed wages. This is something that President Trump rightly opposes, as it would change the make-up of the United States, to the detriment of our national identity.

So, what are we to do?

The United States can reshore its manufacturing, but must do so on a limited, prioritized basis. We should not care where our tennis shoes, blue jeans, or T-shirts are manufactured. Those industries hold no vital interest to the United States.

However, we should prioritize the reshoring of industries such as pharmaceuticals, computer chips, drones, and food additives.

“Approximately 40% of finished pharmaceutical products and 80% of active drug ingredients sold in the U.S. are manufactured overseas, according to a report by the GAO. This includes a significant portion of generic drugs, with roughly 80% being produced overseas.”

China controls 80% of the drone market in the United States.

83% of semiconductors are manufactured outside of the United States.

As a free market capitalist, I do not like the government picking “winning industries,” but there is a national security aspect to consider, and President Trump is doing this.

The president recently floated the idea of taking the $2.2 billion in frozen assets from Harvard University and using that money to fund trade schools, where people could learn to support the manufacturing that is in the nation’s vital and national interests.

At the end of the day, the United States will never become a manufacturing superpower. Our cost structure and standard of living are simply too high… and that is a good problem to have.

However, we must focus on reshoring those industries that are vital to our national defense and our national interests. With the right focus and incentives, we can quickly achieve this strategic goal and free ourselves from our competitors’ supply chain whims.

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Jim Nelles is a Navy veteran and supply chain consultant based in Chicago. His articles have appeared in the Washington Examiner, Newsweek, Foxnews.com, and The Daily Wire. He has served as a chief procurement officer, chief supply chain officer, and chief operations officer for multiple companies.

The views expressed in this piece are those of the author and do not necessarily represent those of The Daily Wire.

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