HIGH MIX: Space-based Manufacturing, Copper Chaos and the Productivity Paradox

Reindustrialization news for July 14, 2025

Welcome to HIGH MIX, our weekly newsletter about the reindustrialization of the United States.

“Copper Tariffs Won’t Bring Back US Manufacturing” BLOOMBERG

Matthew Yglesias is playing undertaker, declaring Trump’s 50% copper tariffs—going into effect August 1st—dead on arrival for America’s manufacturing revival.

His piece paints a grim picture: tariffs will spike costs, kneecap producers from carmakers to homebuilders, and fail to resurrect U.S. copper mining. It’s a tidy narrative, loaded with skepticism about protectionism’s power to bring back factories. But while Yglesias is busy writing manufacturing’s obituary, he’s missing the heartbeat of a sector that’s far from flatlining.

Let’s start with the bad news: Yglesias isn’t wrong to highlight the pain. Copper prices are already jittery, with futures spiking 2.6% after Trump’s July tariff announcement. The U.S. imports 40% of its copper, mostly from Chile, and a 50% tariff could jack up costs for pretty much everything that uses wiring. Yglesias leans hard into this, arguing tariffs are a self-inflicted wound, inflating costs without creating new mines.

He’s got a point: opening a copper mine takes years, not months, and regulatory red tape doesn’t exactly help.

But that’s also where Yglesias trips over his own pessimism. The Financial Times tells a different story, one where tariffs are already rattling global supply chains in America’s favor. Chinese copper exports dropped 25% in Q1 2025, thanks to early tariff threats, pushing U.S. firms like Freeport-McMoRan to ramp up domestic production. Freeport’s Arizona mines are doing great, with plans to double output by 2027.

Trump’s February 2025 executive order invoked the Defense Production Act to fast-track critical mineral projects, including copper, slashing permitting times and funneling loans to new mines. Yglesias dismisses tariffs as futile, but they’re forcing a rethink of globalized supply chains, nudging investment toward U.S. soil.

To Yglesias, manufacturing’s a lost cause, still stuck in the 1980s rust-belt rut. Wrong. The sector’s been clawing its way back—800,000 factory jobs added from 2021 to 2024, driven by policy muscle like the CHIPS Act and private bets on semiconductors, EVs and aerospace.

Tariffs aren’t a magic wand, they’re a crowbar, prying open opportunities for domestic producers.

Yglesias’ quick take misses the long game. Tariffs may be messy, costly, and no guarantee of a manufacturing utopia. But they’re a signal to the world: America’s done relying on imports for key resources.

“Investors appear to like a company with big space manufacturing ambitions” ARS TECHNICA

Microgravity lets molecules dance differently. Free from Earth’s pull, they form purer, more stable structures. Varda’s ritonavir crystals, grown on their orbital assembly satellite W-1, showed no degradation post-reentry, a promising sign for the core engineering premise that they’re betting could transform drug development.

Beyond pharma, their capsules support hypersonic tests for the U.S. Air Force and NASA, hinting at defense applications that could outpace terrestrial tech. (Although one would think just getting missile tests to space at all is the essential part).

Most crucially, it’s a chance for the U.S. to out-innovate China in a high-stakes arena where Beijing’s already flexing its muscle. China’s state-backed firms like CASC are launching reusable rockets and eyeing space-based solar by 2035. The U.S. edge lies in agility: Varda’s lean team, backed by private capital, claims to pivot faster than China’s bureaucracy.

“We’re scaling up production and next-gen spacecraft,” says co-founder Delian Asparouhov, eyeing reusable capsules to slash costs.

Investors like Peter Thiel and Khosla Ventures see the vision: space can be the perfect location for certain kinds of high-value manufacturing. Varda just raised $187 million in Series C funding to make space manufacturing not just a sci-fi theoretical but a real U.S. advantage in the global tech race.

“The ‘productivity paradox’ of AI adoption in manufacturing firms” MIT SLOAN

U.S. factories pivoting to industrial AI will hit a speed bump: a 1.33% productivity dip in the first 12-18 months, per MIT Sloan research, before gains in efficiency and output kick in.

This “J-curve” effect bogs down firms chasing automation and leveraging tech like robotics or predictive maintenance. With 65% of manufacturers testing AI since 2023, the tech’s potential to streamline production is undeniable, but the path isn’t smooth.

This decline isn’t only a matter of growing pains; it points to a deeper misalignment between new digital tools and legacy operational processes, the researchers found. AI systems used for predictive maintenance, quality control, or demand forecasting often also require investments in data infrastructure, staff training, and workflow redesign. Without those complementary pieces in place, even the most advanced technologies can underdeliver or create new bottlenecks.

Early adopters face the steepest hurdles—retooling data systems while being the first to discover bugs, retraining workers with scant documentation, syncing AI with old machinery—that can stall progress. Smaller plants, especially those with less tech-savvy crews, risk longer slumps if training lags. Still, workers mastering AI tools, like welders using defect-detection software, can boost output by up to 14%.

Just over 1% productivity dip for a full-line rethink sounds less like a J-curve and more like a brief, expected stall that can be accounted for.

“Bridging Manufacturing’s Skills-Tech Divide” ADVANCED MANUFACTURING

American manufacturing is always trying to ride a tech wave—AI-driven CNC machines, robots whirring alongside workers, and digital twins simulating entire factories. But there’s a big catch right now: a yawning skills gap that’s threatening to derail progress.

As factories deploy the latest tools, there aren’t enough workers who can program, maintain, or optimize these systems. The U.S. risks hindering any industrial comeback unless it bridges this divide.

Advanced manufacturing demands skills that traditional shop-floor training doesn’t cover. CNC programmers need to understand G-code and machine learning to tweak settings on the fly. Maintenance techs aren’t just fixing motors or linear actuators anymore—they’re troubleshooting IoT sensors and other high-tech stuff.

So, what’s driving this gap? For starters, education’s lagging. Vocational programs, once the backbone of manufacturing, train welders and machinists but rarely teach Industry 4.0 skills like data analytics or robotics integration.

Companies like Siemens are partnering with platforms like Tulip Interfaces, whose no-code software lets workers build apps to monitor production lines, cutting training time by 30%. Apprenticeships are making a comeback, too—GE’s program in North Carolina blends shop-floor work with data science, turning rookies into hybrid techs in under a year.

China, meanwhile, pumps out 10 million STEM graduates annually, dwarfing U.S. efforts. If America wants to compete, it needs to move faster—public-private bootcamps, tax breaks for training, or perhaps even late-career code-heavy training for older tradies who could meet younger workers with less hands-on experience in the middle.

“Trade War? No Problem—If You Run a Trade School” BLOOMBERG

U.S. trade schools, like Texas State Technical College, are seeing enrollment jump 4.9% from 2020 to 2023, as young workers ditch four-year degrees for skills in welding, machining, and electrical work.

With 42% of Gen Z opting for vocational training to avoid student debt, these programs are producing talent for a manufacturing sector hungry for skilled labor.

Employers, from aerospace giants to smaller startups, clamor for these graduates, with median salaries for skilled trades hitting $60,000—outpacing many college grads.

For communities in Texas and beyond, an influx of 10,000 new trade students annually signals a rebirth of hands-on work. Manufacturing’s comeback hinges on these skilled hands, not just new factories. But the boom isn’t flawless: schools struggle to scale instructor hiring and equipment upgrades to match enrollment.

And I have to wonder: are we training these kids in the hands-on skills but not also folding in other technical skills that will define many of the skilled trade jobs ten or twenty years from now?

“Ohio awards $310 million to Anduril Industries for advanced manufacturing facility” 10TV.COM

With a $310 million grant, Ohio’s rolling the dice on Anduril Industries’ Arsenal-1, a sprawling 5-million-square-foot facility near Columbus which will create AI-powered drones and other autonomous systems for the Department of Defense. This move comes amid a broader push by the Pentagon to enhance their drone capabilities.

Anduril are expected to provide 4,000+ jobs, a $530 million payroll, and a $910.5 million total investment over the next decade.

Arsenal OS, Anduril’s digital production engine developed in-house, promises to redefine manufacturing efficiency (although we’ve heard that before). Combined with the massive investment and ties to Wright-Patterson Air Force Base, it’ll position Ohio as a new nerve center for aerospace and defense innovation.

It’s a hefty investment for Ohio, but the economic return should be worth it: a $2 billion annual economic boost by the end of the term they agreed upon.

“Lithium battery company moving operation to Illinois this year. See where it's setting up shop” JOURNAL STAR

Pure Lithium, a Boston-born battery innovator, is packing up and moving to Chicago’s Fulton Market district, backed by a $46 million investment to kickstart production of lithium metal batteries.

Set to launch this fall, their facility will create at least 50 jobs, targeting drones, electric vehicles, consumer electronics, and grid storage. This dovetails with the global race to secure sustainable battery tech, especially as demand for cobalt-free, high-performance cells surges.

Illinois’ “Reimagining Energy and Vehicles” program sweetens the deal, emphasizing the state’s all-in push for a clean energy future. Governor Pritzker’s talked about a “green revolution,” but taxpayers footing the bill will of course want hard proof of economic returns.

Pure Lithium’s claim to fame—batteries without graphite, nickel, or manganese—could shake up supply chain demands, but scaling from lab to factory floor is no small feat. Early hype doesn’t always deliver. Still, Chicago’s workers and businesses stand to gain.

I’m Concerned About The Cars

I’m a Car Guy, through-and-through. I like speed, noise and quality engineering.

That’s why our recent podcast with Kevin Williams from InsideEVs left me in a state of shock. Much to my chagrin, he laid out the facts surrounding the Chinese automotive industry, and how they’re outpacing not just U.S. automakers but brands across the West.

Granted, BYD and Xiaomi can’t offer the noise of a Detroit V8 or howling flat-six from Stuttgart, but they’re demonstrating that they don’t necessarily have to in order to compete globally.

Their EV market is booming, their vehicle quality has substantially improved, and Williams’ firsthand coverage has a lot of Car Guys like me all riled up.

“Ford says Michigan EV battery plant 'on track' for production tax credits” REUTERS

Ford’s $3 billion electric vehicle battery plant in Marshall, Michigan, now 60% complete, is set to snag federal production tax credits after a revised tax bill preserved incentives for U.S.-made batteries.

Slated for 2026 production, the 2-million-square-foot facility will employ 1,700 workers and produce low-cost lithium-iron-phosphate (LFP) batteries using tech licensed from China’s CATL. As global EV demand wavers, this plant strengthens America’s position in the battery supply chain. And despite the recent flip-flopping of both the White House and American consumer tastes, there’s no foreseeable future where the U.S. doesn’t need lots and lots of new batteries when factoring in grid storage.

Yet, the plant’s CATL ties have drawn fire from lawmakers wary of Chinese influence; Ford’s had to navigate a political minefield to secure the deal.

And it is a big deal for Michigan, where manufacturing jobs have hemorrhaged for decades. Those 1,700 positions, with wages averaging $80,000, are a lifeline for Marshall.

Scaling back from 2,500 jobs and 35 gigawatt-hours to 1,700 and 20 gigawatt-hours due to softening EV sales adds a dose of reality, but a projected $80 million annual payroll helps anchor the region’s economy. Ford’s playing the long game, betting on EVs despite policy turbulence. They’re right to do so.

“MP Materials seals mega rare-earths deal with US to break China's grip” REUTERS

MP Materials just clinched a multibillion-dollar deal with the Department of Defense to speed up U.S. rare earth magnet production with the aim of breaking China’s stranglehold on the metals that make high-strength magnets possible. (At least in current bulk form. Companies like Niron are working to remove neodymium and other rare earths from magnets entirely.)

The plan: a new “10X Facility” by 2028, boosting output to 10,000 metric tons annually, plus $150 million to expand heavy rare earth processing at California’s Mountain Pass mine. With $1 billion in financing from JPMorgan and Goldman Sachs, and a 10-year DoD purchase guarantee, MP’s stock is on its way up. [HOW MUCH -ED]

MP want to break China’s grip on rare earth processing—much needed after its April export curbs slashed magnet shipments by 75%. Communities near Mountain Pass and the yet-to-be-chosen 10X site could see 500 new jobs, with machinists and technicians earning $70,000 on average.

MP’s past reliance on Chinese processing raises questions about execution. Until recently, MP shipped much of its rare earth concentrate to China for refining into usable materials like neodymium-praseodymium (NdPr) oxide. Scaling up U.S.-based processing involves complex, capital-intensive steps—separating heavy rare earths like dysprosium and terbium, refining them into magnet-grade materials, and integrating that process into the new facility.

“Energy Secretary Chris Wright to break ground on first US rare earth mine in 70 years” WASHINGTON EXAMINER

Energy Secretary Chris Wright will break ground on Ramaco Resources’ Brook Mine in Ranchester, Wyoming—the first U.S. rare earth mine in over 70 years.

The new $500 million mine will extract metals like neodymium and dysprosium. With a $6.1 million Wyoming grant and DoE funding, the mine and its processing plant could provide 1,000 jobs by 2028.

But rare earth mining is no picnic—processing involves toxic chemicals and heavy water use, and Ramaco’s coal-to-rare-earth pivot carries risks of environmental missteps.

Communities near the mine expect an economic boost, with $65 million in annual activity. Wyoming’s banking on critical minerals, but execution will make or break this milestone.