Offshoring in software development has been around for a very long time. Most large US companies have a mix of onshore and offshore devs. The more mundane the software, and the tighter the financial macro-environment, the more the ratio shifts toward offshoring. This is the way the offshoring cycle has worked for a long time.

However, unlike hardware, software is about information and communication, and cultural context is very important. I have seen firsthand that non-US teams building software for US consumers often don't quite understand the reasoning behind the requirements and may lack polish around basic things like English. (The same is true, of course, in reverse, if US teams build for non-US audiences.) So I think it should be a little bit stickier.

You also cannot copy software design in the same way that you can copy, say, the design of a lathe. A lathe is a lathe, and as long as you've got the tools and materials, a lathe made in the US should not in theory be any different than one built in China. The same is not true of software.

Something I'm curious about, have you seen this happen with countries culturally close to the US? Like teams based in Canada, Ireland, or the UK?

In reality there are incredibly large gaps around even the most basic things like the meaning of words. As a very basic example: the meaning of the word "interesting" differs radically between cultures. Most US employees would think the boss is indeed interested when they describe an idea as "interesting" and may even bring it up again at some later date after more research. Meanwhile, someone from the UK means that it's the dumbest thing they've ever heard and they will be incredibly miffed if it is ever brought up again.

But some manufacturing, in fact a large amount, is Chinese. And I'm not convinced they've got our best interests at heart. Either China needs to calm down over their "Wolf Warrior" style, or we need to cut back on providing benefits to an obviously and increasingly antagonistic power.

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The other part, with respect to Taiwan + China, is that we must defend Taiwan as they are a critical source of advanced-materials (ie: computer chips) to us. Yes, its more efficient to have Taiwan centralize production, but it does come at a cost. We need to be ready to defend Taiwan and keep it safe if we are to continue to build computers and phones out of Taiwan-only parts.

I have a theory that one of the major challenges facing manufacturing in the US is actually the opposite.

A manufacturing company in the US is competing for smart, numerate STEM graduates with the likes of Google who offer graduates $180,000 with zero experience (or so I'm told)

But they're also competing with manufacturers in the far east, where $40,000 is a great salary, for someone with several years of experience.

Difficult to win both competitions.

Hopefully policy makers and the citizenry will resist following what, as you say, the US economy is trying to say.

You see ...

You can stop making elementary machine tools.

You will never stop making (people who can only make elementary machine tools).

They know the tech sent off shore will, for the most part, remain off shore.

Additive manufacturing, an example of "latest tech", is a primary build up target here. It is new and expertise is being created as the tech itself is.

HYBRID DED is going to be the answer to many of those scenarios.

Basically, we couple subtractive with additive and maximize the benefits of both. Done right the risks are greatly reduced as are costs compared to just doing it the legacy way.