Reshaping industrial real estate

A look behind the rhetoric at how to build strategic industrial competitiveness. By Marcus Burtenshaw

- Marcus Burtenshaw

stoppers, a US-based photography gear company, faced a stark reality: producing a simple component domestically would cost over $80 per unit, compared to $7.50 in China, a more than tenfold increase. Their choice was not whether to reshuffle their supply chain but whether to continue selling the product at all.

This example highlights the intense pressures tariffs can impose on manufacturers, pressures that ultimately reshape decisions about production locations, facility requirements and logistics networks.

As these decisions evolve, influenced by factors like geopolitical tensions and the growing need for supply chain resilience, they significantly impact the industrial real estate sector, influencing demand for warehouse space, manufacturing plants and distribution hubs globally.

This article examines the real-world implications of tariff policy, with a particular focus on small and medium-sized enterprises (SMEs), manufacturing competitiveness, supply chain realignment and foreign investment. It revisits the lessons from the first US-China trade war and explores how China sidestepped tariffs through mechanisms like foreign direct invest-ment (FDI) into third-party markets and supply chain restructuring.

The analysis centres on recent US tariffs arising from its trade tensions with China, but draws broader conclusions relevant to policymakers, manufacturers and investors navigating today’s multipolar trade landscape. In doing so, it seeks to move the conversation beyond rhetoric — towards a more strategic, evidence-based understanding of how to build lasting industrial competitiveness.

1. The SME Perspective - Undervalued but Essential