- Amid deepening geopolitical fragmentation, the United States imports $3 trillion in manufactured goods annually. About 25 percent of these are particular “Achilles’ heels”—due to some combination of criticality to national security, supply concentration, and geopolitical distance from trade partners. About 5 percent of manufacturing imports—overwhelmingly computers and electronic products—have all three dependencies.
- We introduce a “ramp-up factor” to quantify what it would take for the United States to produce more at home. For those exposed products in the Achilles’ heel, manufacturing would need to double on average to fully meet domestic demand. In some cases the ramp-up factor is much larger, for example, over five for some active pharmaceutical ingredients and over ten for AI servers. Across all products, the number is smaller: 1.3.
- Running today’s factories at peak capacity would generate $660 billion more in output—but hardly touch the biggest exposures. About 40 percent of this extra production would be in transport equipment and another 40 percent from metals, wood and paper, chemicals, and plastic and rubber.
- Addressing key vulnerabilities would require a transformed industrial base. Building capacity to produce exposed products and their upstream inputs could cost on the order of $2 trillion, about 6 percent of GDP. Funding could be the (relatively) easy part: Specialized skills, supporting infrastructure, sufficient energy, and shovel-ready projects are all needed.
- Nothing will happen without a business case. Maintaining competitiveness in the global economy, and security in a volatile world, may require some domestic ramp-up. But this will entail prioritization and trade-offs, along with new approaches to technology, automation, and skills.
“Made in America” has been part economic policy and part rallying cry for generations. But the United States has been producing less and less of the global total. In 2000, it was the world’s leading manufacturer. Today, the country produces just a quarter of China’s output. The United States did not lose manufacturing dominance overnight, and it remains the world’s second-largest producer. As the global economy grew, trade liberalization, modern shipping containers, and global internet connections unleashed potential for a “great unbundling.” Lower-cost emerging economies took on physical production of many goods, while the United States provided much of the technology and manufacturing know-how.
Should the United States attempt to rebuild its industrial base? For decades, proponents have pointed to the widening trade deficit and shrinking manufacturing base as drags on US growth that drain the economy’s ability to create high-paying jobs. Others counter that the economy operates most efficiently when businesses and consumers can buy the goods and services they want at the highest quality and for the lowest price, wherever they come from, and that the trade deficit arises more from US savings and investment dynamics than from trade policies.
Today’s age of increasing geopolitical competition and rapid technological progress has recast the debate with renewed intensity. Simply assembling goods in the United States may not be enough to alleviate concerns about the manufacturing sector. The materials and components that go into AI technology, smartphones, and electric vehicles are just as crucial. Both economic and national security may hinge on reliable supply chains. For things like ships and chips, the United States may decide it cannot be beholden to others.
Should the United States try to ramp up its manufacturing sector?
It’s not just about limiting risk. In some advanced industries, the rapid innovation that drives national competitiveness and productivity growth increasingly depends on maintaining a close connection with physical production, even where software and design once seemed to be decoupled from manufacturing. For example, like humans, industrial robots driven by AI learn and adapt fastest when they get real-time feedback from the physical world, not delayed, batched input.
For all the current attention, there is limited nuts-and-bolts understanding of what achieving these broad objectives would entail. A great deal of analysis has focused on specific industries critical to national security, including semiconductors, quantum computers, pharmaceuticals, and defense. It gets at important details but is narrow in focus. Another strand of macro-level inquiry looks at factors like balance of trade, labor statistics, and the relative productivity of manufacturing compared to service industries. It is broad but not detailed enough to cast light on specific areas of potential or to quantify trade-offs between efficiency, innovation, jobs, and security.
No matter what, ramping up broad swaths of US manufacturing may seem a daunting prospect. A number of factors would need to be considered. Many thousands of new factories would need to be built. Workers with the right specific skills would need to be available at the right time and in the right places. All of this would require funding, and that would in turn depend on compelling and concrete business rationales—the more expensive the project, the bigger the potential for payoff—and would need to be considered in the context of the policy and regulatory environment. And the transformation would require coordinated shifts of all of these ecosystems across entire supply networks.
But just how daunting is it? Answering that requires first understanding, product by product, the scale of the US production ramp-up needed to fully meet domestic demand. Ultimately, macro-level assessments of necessary labor, funding, sequencing, and timelines hinge on this micro-level data.
This report aims to provide that foundation, focused specifically on the question of existing and needed future capacity, as a critical input for policymakers and business leaders to systematically decide whether and where to prioritize domestic manufacturing efforts. We introduce a “ramp-up factor” for about 5,000 products, to quantify how much more production would be required to meet demand domestically, through some combination of making greater use of existing capacity and creating new manufacturing potential.
Using existing capacity would increase production to the tune of about $660 billion. For a sense of scale, the 2025 US goods trade deficit was $1.2 trillion. But using existing capacity would not make much of a dent against imports where they are most critical and exposed to risks. Producing those products domestically would require building out a manufacturing footprint unlike that in any one place in the world today. Progress is possible but, as with much else, choices will be need to be made.
Made abroad: America’s increasing import dependence
Over the past 50 years, US manufacturing has receded in size relative to the economy as the United States shed its position as the world’s manufacturing leader (Exhibit 1). US factory value added fell from more than 21 percent as a share of its gross domestic product in the late 1970s to less than half that today, while employment has decreased from 22 percent of the workforce to 8 percent. The drop from the 1950s was even larger.1
The United States isn’t unique in this regard. Other advanced economies like Japan, Germany, and the United Kingdom have experienced similar trends, but the speed and depth of manufacturing’s declining share in the United States stand out. In contrast, the manufacturing sectors of emerging markets, particularly China, have grown in both size and sophistication. China alone now produces nearly half of manufactured goods globally, reflecting dramatic shifts in the competitive landscape over the past several decades (see sidebar “Measuring manufacturing output”).2
As the production terrain shifted from the United States to emerging markets, US imports of manufactured goods grew substantially. Over the past two decades, they have increased by about 40 percent in inflation-adjusted terms to about $3 trillion in 2025, or roughly 10 percent of GDP. The trade deficit for manufacturing rose from about $550 billion to $1.2 trillion over the same period. Imports now make up about 35 percent of US goods consumption, up one-third over the past two decades.3
Despite all this, the United States remains the world’s second-largest manufacturing producer and exporter, behind China. With a gross output of more than $7 trillion, including in many of the same categories where it imports large volumes, the United States retains a strong manufacturing base (see sidebar “A closer look at US manufacturing by sector”).
Achilles’ heels: potentially disruptive combinations of criticality, concentration, and geopolitical distance
The mix of geopolitics and technology has intensified the focus on US manufacturing. The world is interconnected but increasingly contentious. This affects how goods move between countries and whether it makes sense to try to produce them at home. Many goods, like computers and other high-tech goods and materials, are central to resilient supply chains, economic prosperity, and national security.
Product criticality, source concentration, and geopolitical distance of trading partners all introduce important dependencies—and the risk of disruption compounds when they overlap. Of the $3 trillion in annual US manufactured goods imports, 25 percent are exposed to at least two of the three dependencies. We call these products “Achilles’ heels.” (We also refer to them as “exposed” throughout this research.) Five percent of imports sit in the bull’s-eye of all three (Exhibit 2).
In 2025, the United States imported about $1.3 trillion in critical manufactured goods, defined as those central to resilient supply chains and national security.4 For example, advanced semiconductors are required to run power grids and telecommunications; specific active pharmaceutical ingredients are necessary to produce lifesaving antibiotics; specialized high-capacity batteries keep our transportation and defense systems operational. If these products disappeared tomorrow, the modern American economy would at least be heavily disrupted, if not grind to a halt.
When US imports of a critical product are not entirely reliable, the situation can pose risks. Altogether, about $1.4 trillion in US imports are concentrated—the country relies on three or fewer economies for the supply of a given resource or manufactured product.5 More than half a trillion dollars’ worth of concentrated product imports are also critical.
When things go smoothly, this is not a problem; indeed, sourcing from one or a small group of economies can lead to greater efficiency. But when there is disruption and an economy no longer can or will keep shipping, supply might be shut off. For example, Taiwan and South Korea produce nearly all of the world’s most advanced semiconductors.6 When the COVID-19 pandemic caused new surges in demand for some products and disrupted supply chains, American households and companies realized just how dependent they were on a handful of economies for semiconductors as well as other products they had not previously considered.7 The United States saw temporary shortages of products as varied as face masks and aluminum cans.
Geopolitics adds a new layer of dependency. A little more than 10 percent of US manufacturing imports, worth nearly $400 billion, are of products that mostly come from geopolitically distant trade partners (see sidebar “Defining geopolitical distance”).8 Imports of these products may come under strain when broader global tensions arise. For example, as part of a trade dispute with the United States in 2025, China implemented restrictions on exports of some critical minerals and manufactured goods, such as materials used for manufacturing semiconductors, and rare earth elements and magnets.
When products are critical and concentrated, like semiconductors and some drugs, risk to everyday life results if supply in one country goes awry. For items that are critical and geopolitically distant, coordinated tension with countries in an opposing bloc can jeopardize procurement. In the case of concentrated and distant products—for example, tricycles and video game consoles—disruption would not endanger lives, but inconvenience and annoyance can be high, and companies can lose money.
A total of $140 billion of US imports sit in the bull’s-eye of exposure: critical, concentrated, and from geopolitically distant trading partners.9 Although small relative to the $3 trillion in overall US imports, this group includes a wide range of exceedingly important goods. What’s more, for more than 90 percent of these products, Americans depend on imports for a similarly overwhelming share of their consumption.
Some products in the bull’s-eye are technologies central to everyday life and whose imports are large. These include smartphones ($59 billion in imports in 2025) and laptops ($49 billion).10 Others have small import values but outsize importance. Rare earth magnets are a prime example of Achilles’ heels. The United States imported only $220 million worth in 2025. But the products they are used in—including electric vehicles, wind turbines, and defense applications—would not run without them.11 More than 90 percent are produced in China, which supplies more than 80 percent of US imports. Another example is pharmaceuticals. China supplies more than 90 percent of US imports by volume for a range of both finished drugs and active pharmaceutical ingredients (including antibiotics and vitamins).12 Indeed, at least 12 types of antibiotics are estimated to be solely sourced from China. It also plays a critical role in the global production of some intermediates for drugs like statins, as well as in making many helper chemicals (such as reagents and solvents) used in producing pharmaceuticals.13
Electronics is the largest, and most exposed, import sector
Nearly one-third of US imports—or $900 billion—are electronics, of which exposed products represent 50 percent (Exhibit 3). Fifteen percent of the total is even more exposed: About 50 items, with combined imports worth almost $130 billion in 2025, face all three dependencies. Most of this value comes from just a few products. Smartphone and laptop imports together account for about $100 billion; headphones ($6.5 billion), computer monitors ($5.8 billion), and keyboards ($1.0 billion) round out the top five.
Imports in other substantial import sectors also see dependencies. In chemicals, which include pharmaceuticals and their precursors, most of the 25 percent of imports that are exposed are critical and come mainly from Ireland. Roughly 65 percent of imports are critical but don’t have other dependencies. Textiles and furniture manufacturing also stand out as having more than 25 percent of imports exposed. These products tend to come from small numbers of more geopolitically distant partners, including China.
Other sectors are notably less exposed. Less than 10 percent of sectoral imports are exposed in transportation equipment, food and beverages, and wood and paper. But in these areas, imports are nevertheless concentrated, largely from Canada and Mexico. These countries together supply half of all US transportation equipment imports. Mexico ships more than 80 percent of US beer imports. Canada is a predominant supplier of US soft-wood imports.
US manufacturing comprises a diverse set of companies, industries, and sectors, with different sets of trade dependencies. A one-size-fits-all approach to reducing these dependencies by producing more at home wouldn’t work. To assess what’s possible and what isn’t, we developed a ramp-up factor to provide insights into the scale of effort needed to produce domestically what’s currently imported. We explore the details in the next chapter.
Quantifying the ramp-up needed to replace imports
Two broad possibilities emerge for increasing domestic manufacturing. Manufacturers can ramp up by creating new capacity or by getting more from what exists. These levers have different implications in terms of what’s needed to achieve them and in their impact on US trade and the broader economy.
Determining how long it takes, and the scale of effort required, is difficult without first understanding the hypothetical scale of the challenge. So is assessing how much of imports could be onshored, whether producing in the United States is more cost-effective than producing elsewhere, which firms would be leading, and whether that should even be the goal.
With this in mind, we created a “ramp-up factor” to gauge by how much domestic production would need to increase in order to produce the amount currently imported. We examined almost 350 manufacturing industries to assess how levels of ramp-up vary (Exhibit 4). They run the gamut from longtime staples like aircraft and petrochemicals (pretty easy to ramp up with existing capacity) to more cutting-edge outputs like semiconductors and data center servers, which would require significant investment to replace what is currently imported.
We start by setting domestic production capacity, running at peak utilization rates from the past decade, to 1. For ramp-up factors between 0 and 1, existing capacity is, in principle, enough to support sufficient incremental production to replace current imports. Producers may squeeze more from current capacity without requiring fundamentally new investment in facilities. Only a limited number of products have ramp-up factors less than 1, all in areas where the United States has well-established capabilities and there is slack capacity, like aircraft and truck-trailer manufacturing.
However, for most products, existing capacity is insufficient to produce the equivalent of what the United States currently imports. Correspondingly, they have ramp-up factors greater than 1. It is calculated by comparing what the United States consumes today with what can be produced by US factories running at full utilization.14 For example, take machinery used to make semiconductors. In 2025, the United States imported about $20 billion worth of these machines, while US domestic production capacity was around $15 billion. To produce an extra $20 billion, the sector’s capacity would have to more than double, hence its ramp-up factor is over 2.
Some products have ramp-up factors greater than 5. These mostly consist of capital goods in electronics, particularly servers for data centers as well as laptops. Some consumer goods with similarly high ramp-up factors include personal electronics such as headphones, video game consoles, and smartphones. This is perhaps unsurprising—the US industrial base to manufacture these products is small, and the value of US imports is very large.
A caveat is in order: Our ramp-up factor captures production shifts required to replace what the United States imports directly. Ramping up production to replace the entire supply chain would require more, a topic we return to in chapter 4.
Importantly, ramping up isn’t an all-or-nothing proposition. Even for products requiring new production capacity to replace all imports—namely, those with ramp-up factors greater than 1—increasing utilization of existing factories could lower import dependency. For example, if auto parts factories ran at their rate of ten years ago, the increased production would amount to about 40 percent of current imports. Of course, this is easier said than done. A range of underlying factors have driven declining utilization, most related to the cost of producing parts relative to market size and the prices that downstream consumers are willing to pay (see sidebar “Measuring the slack in US industrial capacity”). We discuss the role of, and potential for, increased utilization more in the next section.
The US manufacturing footprint for exposed goods is relatively small, and they have higher ramp-up factors
Across all imported products, more than half have a ramp-up factor less than 2, and about a quarter have a factor greater than 5 (Exhibit 5). For exposed products—those with two or more trade dependencies—this picture is flipped: More than half have a ramp-up factor greater than 5, and only 20 percent have a factor less than 2. In large part, this reflects the fact that a greater share of these products are electronics, which also have higher ramp-up factors.
The higher ramp-up factors for exposed products suggest greater reliance on imports—and thus greater potential direct economic impact in the event of a trade disruption. For most non-exposed imports, domestic production represents the majority of domestic demand. If a trade disruption occurred, domestic production could mostly meet US demand.
Altogether, a wide range of ramp-up factors suggests varying degrees of feasibility in boosting domestic production to offset imports. As a starting point, it is helpful to understand some of the economic effects of having firms use existing production resources more fully. In the next chapter, we examine the implications for output, trade, jobs, and exposed industries.
Running factories at full throttle
As the world’s second-biggest manufacturer, the United States can produce a lot more just by tapping its slack capacity. Most US manufacturing sectors operate at about 70 to 80 percent of their maximum sustainable output, and some are working as much as 15 percentage points below peak rates of the past decade. Relative to historic highs, capacity utilization today is low in sectors like transportation equipment (autos and airplanes), rubber and plastics, and furniture. Others, such as food and beverages and nonmetallic minerals, are operating closer to recent peaks.
In short: There’s a lot of unused slack out there. But these “slackers” aren’t being lazy or unproductive. There are understandable economic reasons for many US industries to operate at less than full steam. Raising output is pointless without an accompanying ability to sell additional supply profitably. This may be limited by cost structures, labor availability, and demand profiles.
Nevertheless, unused slack capacity is an attractive lever to explore; it does not require designing new factories or putting new capital in the ground. For that reason, we examined what could in theory be achieved with the existing US manufacturing base in the near term.
Slack capacity could accommodate a lot of ramp-up for autos—but not electronics
What would happen if manufacturers were effectively able to “pick up the slack”? Ramping up this way would meaningfully boost production of a few longtime stalwarts that have ramp-up factors of about 1—notably transportation equipment, including aircraft and automobiles.
Sectors producing large volumes of intermediate goods experience smaller gains in absolute terms, but larger shares compared with total imports. For example, current slack capacity for rubber and plastics and for wood and paper represents more than 50 percent of 2025 import value (Exhibit 6).
Taken together, this could mean a lot of output. But the impact would be more limited on many future-shaping technologies, including AI, that face many of the trade dependencies outlined earlier. In the electronics sector as a whole, existing capacity cannot support an increase in domestic production commensurate with current imports. Increased production would represent only about 5 percent ($44 billion) of the current US electronics import bill. Correspondingly, it has a high ramp-up factor of 2.4.
Current slack manufacturing capacity is equivalent to two-fifths of today’s goods trade deficit
All told, ramping up the output of existing US manufacturing capacity, by running factories back at decade-high usage, could represent about $660 billion in additional output. More than 60 percent of that value comes from three sectors: transportation equipment ($280 billion), metals ($80 billion), and wood and paper products ($60 billion) (Exhibit 7). These sectors have both a large amount of production capacity and a relatively high level of slack.
Our estimates show that most of this increase in output—about $530 billion of the $660 billion—could in theory replace products that the United States currently imports, equivalent to more than two-fifths of the US manufactured goods trade deficit. The remaining $130 billion could serve domestic or export markets.
These values represent theoretical approximations. How much more is actually produced, or how much the trade deficit narrows, depends on whether US producers have a market for their goods. Take some familiar beverages to illustrate the point. With a ramp-up factor of 1.3 and relatively low capacity utilization, a lot of whiskey could potentially be onshored with existing US capacity. But some drinkers may just prefer scotch to bourbon. Wine’s ramp-up factor is similar, but connoisseurs may prefer a French Bordeaux to a California merlot. These sectors wouldn’t move the needle in terms of output or the trade deficit, but they’re instructive in showing the real-world issues involved.
For bigger sectors, even if auto capacity could be ramped up, car buyers may prefer Korean SUVs to American pickups. Industrial buyers of chemicals may have long-standing supplier relationships with Swiss manufacturers instead of American ones.
Peak utilization would make little dent on deficits for the most sensitive product-level exposures
What about exposed products, with higher ramp-up factors, that are often at the center of national security? There, the effect on trade is limited.
Zooming in on these imports, like leading-edge semiconductors that are both critical and globally concentrated in their geographic origin, we find that increasing capacity utilization to recent peaks would not make a broad impact. Indeed, increasing utilization would potentially offset 10 percent or more of imports, or only $45 billion of products, representing about 6 percent of exposed products (Exhibit 8). And looking even more narrowly at products in the bull’s-eye of all three trade dependencies, the share falls to just 2 percent.
There is also, of course, the question of whether producers may be able to get more from their existing capacity by boosting productivity. Cutting-edge manufacturers provide ever-increasing examples of AI and technology driving innovations and greater automation, and thus further capacity growth.15 However, as ramp-up factors suggest, productivity would need to more than quintuple for over half of products, not something that can likely be squeezed out of existing facilities. As we discuss in the next chapter, some of the most productive factories in the world by output volume, such as those in China known for their advanced robotics, produce at two to three times US levels. Even if US manufacturers made the capital investments to increase productivity of their existing plants, they still would likely not be producing enough to cover exposed imports with existing factories.
In sum, even if the United States ran factories at full capacity and experienced productivity improvements, it wouldn’t produce a lot of the economically sensitive imports that rely on multiple trade dependencies. Addressing that challenge would therefore require transformation in many sectors, as we explore in the next chapter.
The new capacity needed to address trade exposures
The United States imports many important things it needs—from smartphones to sneakers, from dysprosium to data processors, from ships to chips. About $140 billion of imports hit the bull’s-eye of exposure: critical, concentrated, and coming largely from geopolitically distant trading partners.
The most brute-force way to reduce trade dependency is to replace or reduce the use of specific goods that are exposed. This would require innovating product design and production, and some efforts are underway.16 Unless and until such engineering progress is made, these options require some degree of sacrifice or more expense.
Shifting trading partners is another way to reduce dependency. A country can rearrange sourcing to more aligned countries to reduce geopolitical distance and diversify to more trading parters to reduce concentration. Each approach can present challenges. For example, for a host of products—spanning solar panels and LED lamps through to electric handsaws and microwave ovens—China represents more than half of the global export market. Finding alternative suppliers at scale could be tricky.17
Another option—the subject of this research—is to ramp up domestic production to meet more of domestic demand. Increasing production to eliminate trade dependencies would entail fundamentally revamping the US industrial footprint. After all, the reliance on imports exists because of strong and long-standing economic forces. This section examines how different the resulting footprint would need to look from today’s—and from any other individual country’s—and gives a rough estimate of what it might cost.
A key takeaway is that ramping up production of exposed products requires more than a piecemeal approach. Producers basically need to go big with significant, persistent investment and hiring to create the kind of industrial capacity that would make the United States meaningfully less dependent on foreign suppliers. Funding this would require companies and investors to believe in the long-term business case. And funding could be the easier part. Ramping up would also require specialized skills, infrastructure to support flows of goods and materials, and sufficient energy, together with the ability to quickly scale new projects by gaining rapid permitting approvals, for example. Otherwise, ambitions may need to be ratcheted back.
Some manufacturing sectors would require big increases in overall production; others would not
As discussed above, US production of many exposed products would need to increase a lot—by more than a factor of five for over half of exposed imports by value. Looking at the bull’s-eye of trade-dependent imports (critical, concentrated, and geopolitically distant), we find that the average ramp-up factor is about 3 in textiles and apparel, and almost 10 in electronics (Exhibit 9).
For sectors like electronics, textiles, and furniture manufacturing, ramping up production of exposed products wouldn’t just drastically boost manufacturing of those specific products. It would transform the full sectoral-level manufacturing footprint. Most saliently, for electronics, increasing production to match current imports for all exposed products would require increasing the $600 billion US electronics sector’s capacity by 75 percent—a massive undertaking. That’s because so many products in the sector are trade-exposed, and because US electronics production is quite small compared with its enormous imports. The overall increase to match exposed imports would be smaller but still substantial for textiles and apparel (a roughly 40 percent increase versus today’s productive capacity) and for furniture and miscellaneous manufacturing (about 20 percent).
But ramping up production of exposed goods doesn’t always translate to big increases in total production. Take vitamins as an example. They are important for human health, and many are also essential inputs for the US livestock industry. The United States imports more than $1 billion annually, with products often at the nexus of all three dependencies: critical, concentrated, and imported from geopolitically distant China. US manufacturing of many vitamins is negligible, and the ramp-up factor is accordingly high.18 The United States could, in theory, massively scale up vitamin manufacturing. Seen from that view, it would be a huge change. That said, it would not move the dial on the overall footprint of the $1 trillion US chemicals sector. The picture is similar for a range of specialty products across transportation equipment as well as other sectors like plastics and rubber products: Ramp-up factors for exposed products are relatively high, but ramping up their production would imply only modest changes relative to how much these large sectors already make.
