The United States is stepping up efforts to strengthen domestic manufacturing supply chains as foreign companies increase investment in American factories, shipyards and other industrial facilities.
The push reflects a growing concern that new factories alone will not be enough to rebuild U.S. manufacturing capacity. Companies investing billions of dollars in American production also need reliable networks of domestic suppliers capable of providing components, equipment and specialised services.
Treasury officials and the Small Business Administration are working with foreign investors to identify areas where those supplier networks remain weak and determine how smaller American businesses can expand their production capabilities.
One example is the Philadelphia shipyard, which was acquired by South Korea’s Hanwha Ocean and Hanwha Group in 2024. Hanwha expects to invest about $5 billion in the facility, potentially expanding its workforce from approximately 2,000 to 10,000 employees.
That expansion could also require the shipyard to work with more than 1,000 suppliers, most of them expected to be based in the United States. The scale of the project demonstrates why policymakers are focusing not only on attracting foreign capital but also on ensuring that American suppliers can keep pace with the resulting increase in demand.
New Programme Targets Smaller American Suppliers
To address these challenges, the administration is developing a Strategic Vendor Program aimed at strengthening domestic supply chains and helping small and medium-sized businesses increase their capacity.
Smaller manufacturers can play an important role in rebuilding U.S. industrial networks, but many lack the financing, equipment or production capacity required to become suppliers to large international companies.
The new programme is currently in its pilot phase and is intended to identify businesses that could fill important gaps in domestic manufacturing.
The approach could be particularly important in industries where production is expanding rapidly. A new factory may create thousands of direct jobs, but its wider economic impact can be considerably larger when local companies provide machinery, components, transportation, maintenance and specialised services.
Strengthening these supplier networks could therefore allow foreign investment to generate a broader economic impact across American communities.
The strategy also reflects a shift in how policymakers view foreign investment. Rather than treating foreign-owned manufacturing plants simply as individual projects, officials are increasingly looking at how those investments connect with the wider U.S. industrial ecosystem.
3. Foreign Companies Face Difficulty Finding US-Based Suppliers
The challenge is not limited to traditional manufacturing.
Officials highlighted the example of a Finnish-owned quantum refrigeration company that has struggled to find U.S.-based suppliers capable of producing specialised dry compressors.
The situation illustrates a wider problem: even when companies are willing to manufacture in the United States, they may still depend on specialised components that are difficult to source domestically.
Creating a complete domestic supply chain can therefore take considerably longer than building an individual factory.
This is particularly relevant to emerging industries such as quantum computing, advanced electronics, artificial intelligence and other high-technology sectors. These industries often depend on highly specialised components that are manufactured by a relatively small number of companies around the world.
The U.S. government is attempting to address these vulnerabilities by identifying missing capabilities before they become obstacles to industrial expansion.
The objective is not necessarily to produce every component domestically, but to ensure that strategically important industries have dependable sources and alternatives when disruptions occur.
Investment Screening Process Also Being Streamlined
Alongside supply-chain development, the administration is working to make the process for reviewing foreign investment more transparent and efficient.
The Committee on Foreign Investment in the United States (CFIUS) reviews foreign acquisitions and investments that could raise national-security concerns.
Officials are seeking to speed up the review process while making requirements easier for investors to understand. New digital tools, including an updated website and the Known Investor Program, are intended to make the system more predictable for companies seeking to invest in the United States.
The effort reflects a balancing act. Washington wants to attract foreign capital that can expand American manufacturing while maintaining safeguards around investments involving sensitive technologies, infrastructure and national security.
A more predictable review system could make it easier for trusted foreign investors to move forward with projects while allowing authorities to concentrate their scrutiny on transactions presenting greater risks.
Manufacturing Revival Depends on More Than Foreign Capital
The renewed emphasis on supply chains comes as the United States attempts to rebuild industrial capacity after decades of manufacturing employment losses.
The Small Business Administration provided approximately $3 billion in support for manufacturers in 2025, including $32 million for shipbuilders, as part of efforts to strengthen domestic production.
The current strategy combines foreign investment with domestic supplier development, financing for smaller businesses and more efficient investment screening.
The approach could create a multiplier effect. A foreign company investing billions of dollars in an American factory can generate direct employment, but the economic benefits become significantly broader when hundreds or thousands of domestic suppliers participate in the resulting production network.
For the United States, the challenge is ensuring that these supply chains develop quickly enough to support the country’s growing industrial ambitions.
Foreign investment is already bringing substantial capital into American manufacturing. The next step is making sure that investment is connected to a strong domestic network capable of supplying the workers, components and specialised services that new facilities require.
The effort ultimately reflects a broader change in U.S. industrial policy: attracting factories is only the beginning; building the supplier ecosystem around them is what can make manufacturing investment durable.