Struggling with pandemic supply chain issues, Ford Motor is working to make its own batteries, including in America. “In the medium and long term, securing raw materials, processing, precursor and refinement and establishing battery production here in the US and around the world is an important work statement for us,” said Jim Farley, the company’s CEO. a profit call last week.
Companies are also starting to come under pressure to price in the true cost of carbon emissions from ship components, which could push them to move factories closer to consumers.
Scott N. Paul, president of the Alliance for American Manufacturing, said economic and political risks, along with carbon cost calculations, encouraged companies to gradually relocate production to the United States.
“I just see that trend accelerating,” he said.
Long-term population changes can also amplify the effects of a slowdown or setback in globalization, pushing up prices by making labor more expensive. The United Nations estimates that by 2050, one in six people worldwide will be older than 65, compared to one in 11 in 2019.
That aging means that, after decades in which a new global labor pool made workers cheap and easy to find, recent global labor shortages could continue. That could drive up wages, and companies could pass on higher labor costs to customers by raising prices.
“Demographics and the reversal of globalization mean that much of it will probably be permanent — clearly not all of it,” said Charles Goodhart, a professor emeritus at the London School of Economics, on price and labor issues in the pandemic era. Mr. Goodhart co-wrote a book in 2020 arguing that the world was on the cusp of a demographic turnaround.
“There will be structural forces that are likely to increase inflation over the next two to three decades,” he said.