weighted score 6.6 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
United States
Supply base depth, trade access, innovation, and quality standards for the United States as a sourcing and manufacturing partner.
Labour cost competitiveness
2
US manufacturing wages are among the highest globally — federal minimum wage $7.25/hour but effective manufacturing wages $18–28/hour in most states. Unit labour costs are only competitive for highly automated or high-value-added production.
Supply base depth
7
Strong industrial base in aerospace, defence, chemicals, pharmaceuticals, and advanced materials. Electronics and consumer goods manufacturing is less developed domestically. Reshoring initiatives (CHIPS Act, IRA) are rebuilding semiconductor and EV battery supply chains.
Logistics & infrastructure
8
Extensive interstate highway, rail freight, and port network. Major container ports at Los Angeles/Long Beach, New York/New Jersey, and Savannah. Air freight infrastructure world-class. Inland logistics networks deep.
Workforce skills
8
Strong university and community college system. Deep technical talent pool in engineering, software, and life sciences. Skills gaps exist in precision manufacturing trades — vocational training investment has declined over decades and is being partially rebuilt.
Scalability
3
US manufacturing capacity for labour-intensive goods is limited and expensive to rebuild. Capital-intensive and automated manufacturing scales well; labour-dependent categories face cost constraints. Reshoring timelines measured in years, not months.
Ease of doing business
7
Business formation is straightforward at federal level. State-level regulatory variance is significant — some states (Delaware, Texas) are highly business-friendly; others have heavier compliance burdens. Employment law, tort liability, and environmental permitting add complexity.
Trade access & tariffs
9
Large network of FTAs including USMCA, KORUS, USSFTA. US domestic market is the world's largest single-country import market. Access to the US market is itself a major attractiveness driver for US-based suppliers. Note: current tariff policy is volatile — Section 301 tariffs on China and recent reciprocal tariff announcements create near-term uncertainty.
Sustainability baseline
6
Federal sustainability standards are weaker than EU. However, California and other progressive states set standards that effectively create de facto national floors for many product categories. Voluntary ESG reporting is widespread among listed companies. Scope 3 emissions accounting is less standardised than EU.
Innovation & IP
8
US IP protection framework is among the world's strongest. USPTO enforcement, USITC proceedings, and federal court IP litigation are well-developed. US remains the world's leading source of technology licensing and pharmaceutical innovation. R&D spending (federal + private) is the highest globally in absolute terms.
Quality standards
8
FDA, USDA, CPSC, and sector-specific agencies set high mandatory standards. US quality certification (FDA-approved, USDA-certified, UL-listed) carries strong international recognition. ISO adoption is high in manufacturing sectors.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Wage structure
- US manufacturing wages have risen significantly — median wages for production workers now range from $18–28/hour depending on sector and state. Total employment cost including benefits, payroll tax, and workers' compensation typically adds 30–40% above base wage. High labour cost makes the US uncompetitive for labour-intensive manufactured goods relative to Asia.
- Automation as cost offset
- US manufacturers are investing heavily in automation to offset labour costs. Robot density in US manufacturing has increased significantly, particularly in automotive and electronics. This is partially restoring cost competitiveness for capital-intensive categories where labour is a smaller share of total cost.
- Reshoring economics
- IRA (Inflation Reduction Act, 2022) and CHIPS and Science Act (2022) provide substantial subsidies for onshoring semiconductor and clean energy manufacturing. These subsidies are reshaping the economics for specific high-priority categories. General manufacturing reshoring without subsidy support remains economically challenging.
- Regional variance
- Right-to-work states in the Southeast (Tennessee, South Carolina, Alabama) have lower effective labour costs and have attracted automotive and manufacturing investment. Energy costs also vary significantly by state — a material factor for energy-intensive manufacturing.
Supply Base & Infrastructure
Supply Base & Infrastructure
- Aerospace and defence
- The US has the world's largest and most developed aerospace and defence supply chain. Boeing, Lockheed Martin, Raytheon, and their Tier-1/2 supplier networks represent deep, specialised capabilities that cannot be replicated at scale elsewhere.
- Pharmaceuticals and biotech
- The US biotech and pharmaceutical sector is the global leader in drug discovery and development. Manufacturing capabilities in biologics, cell and gene therapy, and specialty chemicals are world-class. FDA-approved manufacturing sites carry premium market access value.
- CHIPS Act and semiconductor
- The CHIPS and Science Act allocates $52 billion to rebuild domestic semiconductor fabrication. Intel, TSMC, Samsung, and Micron are building or expanding US fabs. This will shift the supply base composition for advanced semiconductors over the next 5–7 years.
- Consumer goods gap
- US domestic supply chains for consumer goods — apparel, household products, electronics assembly — are limited. These categories are dominated by Asian supply. Nearshoring to Mexico (via USMCA) is the primary partial substitute for some labour-intensive categories.
Trade Access & Business Environment
Trade Access & Business Environment
- FTA network
- The US has 14 bilateral or regional FTAs covering 20 countries, including USMCA (Canada/Mexico), KORUS (South Korea), US-Australia, and Singapore. No US FTA with the EU is currently in force — TTIP negotiations stalled in 2016 and have not been revived.
- Trade policy volatility
- US trade policy has become significantly more volatile since 2018. Section 301 tariffs on Chinese goods (25% on most categories) remain in effect under the current administration. Reciprocal tariff announcements create near-term uncertainty for supply chain planning. Buyers should build tariff scenario analysis into US-origin sourcing decisions.
- USMCA and nearshoring
- USMCA provides tariff-free access between the US, Canada, and Mexico subject to rules of origin requirements. This makes Mexico an attractive nearshoring option for US-market supply chains — many buyers are shifting from China to Mexico-based production using US-controlled supply chains.
- Regulatory environment
- Business environment is generally open and transparent. IP enforcement is strong. However, product liability exposure, employment law complexity, and environmental permitting timelines are real operational concerns for manufacturing operations.
Innovation, IP & Quality
Innovation, IP & Quality
- IP system
- The USPTO is one of the world's most developed patent offices. US courts enforce IP rights predictably and effectively. Trade secret law (DTSA), copyright, and trademark frameworks are mature. The US is the world's largest exporter of IP — royalty and license fee receipts exceed $120 billion annually.
- University-industry linkage
- The Bayh-Dole Act (1980) enables universities to commercialise federally-funded research. This has produced a strong culture of technology transfer — MIT, Stanford, Harvard, and dozens of other institutions have active licensing and startup ecosystems directly connected to manufacturing supply chains.
- Quality standards bodies
- ANSI, ASME, ASTM, and sector-specific bodies (FDA, FAA, UL) set standards that are widely referenced globally. US military standards (MIL-SPEC) remain influential in defence and aerospace supply chains. Compliance with US standards typically satisfies EU and other international requirements for technical products.
- R&D investment
- US gross R&D expenditure exceeds 3% of GDP — driven by both federal investment (NIH, NSF, DARPA) and private sector (tech companies, pharma, defence). This sustains the US position as the world's leading source of technology innovation across most sectors.