Robotic Reindustrialization of America
President Trump’s tariffs are a ploy to reduce the U.S. trade imbalance and restore domestic manufacturing, but initiative goals indicate the replacement of tens of millions of foreign production jobs,¹ by a U.S. economy with only 7 million working-age unemployed, and only 2 million receiving benefits.² The extent to which the President will achieve his “re-shoring” goals in four years’ time is still in question, but whether man or machine will perform the vast majority of all new manufacturing jobs in America, is not. Add expensive labor costs and a lack of trade skills to America’s worker shortage problem, and we may have the recipe for a robotics explosion in America.
I know a successful third generation dairy farmer whose boys didn’t want to destroy their knees milking cows just because their ancestors did. Two milking robots later the boys are on the farm with healthy knees, the quality of life seems to be improved for everyone on the farm, the cows are noticeably happier and produce better, and the farm is a more profitable enterprise with a sturdier future, even considering the cost of two robots and a new barn. This farmer made a wise decision, and his may be a textbook case study for what is about to play out across the U.S. manufacturing sector. Since, as investors, we deal in probabilities not certainties, let’s consider the set-up for this potential opportunity and the associated risks in the hope we can formulate an educated opinion on the matter, and later adopt an investment strategy with it.
The Set-Up
The extent to which the Trump Administration can displace foreign manufacturing jobs with American jobs a strong demand will exist for functional automation.
Artificial Intelligence (AI) is in place to drive and manage a surge in U.S. manufacturing with greater proficiency than ever.
Highly functional and reliable robotic technology is in place and continues to develop.
U.S. investors are sitting on $7 Trillion in cash today, a sum capable of fueling a surge in functional automation.³
The Risks for Derailment
The Trump administration may fall short of securing anticipated trade deals, reducing the U.S. trade deficit, and reshoring tens of millions of manufacturing jobs, in which case anticipated demand for robots would fall short.
Tariff uncertainties may introduce a near-term global recession/bear market that could stifle demand, reduce investment and delay a surge in U.S. robotics manufacturing.
AI is in the development stage and lacks the energy infrastructure and energy production necessary to drive and manage an explosion in functional automation.
As you consider what actions this information should invigorate, I suggest:
“Think, don’t act” as you do your due diligence, especially since the robotics sector and machinery industry are in bearish mode.⁴
Start building a “Watch List” of businesses which dominate robotics production and implementation in America.
Remember as you search for industry dominators that capital efficiency and free cash flow matter, especially in a developing industry with a potential recession on the horizon.
Follow the tariff story and maintain a thoughtful assessment of the evolving probability Trump can achieve his U.S. manufacturing objectives.
Think about how you will raise the necessary cash to capitalize on this investment opportunity, should it fully develop, when the Robotic sector turn bullish.
Think about it, and may the good Lord bless your efforts towards excellence in investing.
Shaun.
“Do you see a man skillful in his work? He will stand before kings; he will not stand before obscure men.” ~Proverbs 22: 29
1,3 TradeSmith Daily, “Made in the USA, But Not by Humans”, April 30, 2025
2 AI Overview, Bureau of Labor Statistics, “US Unemployed”, May 2, 2025
4 Chaikin Analytics, Power Gauge, “BOTZ”, May 2, 2025
The opinions voiced in this material are general and are not intended to provide specific recommendations. The economic forecasts set forth in this commentary may not develop as predicted. Diversification of portfolio holdings does not necessarily protect against loss or guarantee returns.
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