Via Reihan Salam, BusinessWeek wonders wondering whether the combination of a falling dollar and soaring fuel costs might prove to be a boon for U.S. manufacturing:

Consider Japan's steel industry, which depends on imported iron ore and coal to create high-end metal for Japanese automakers in the U.S. In 2003 it cost $15 to ship a ton of iron ore costing $30 from Brazil to Japan. By last fall, while the ore had jumped to $80 per ton, shipping costs had risen to $90. Shipping of raw materials now accounts for 13% of the price of rolled steel used in car bodies, estimates CLSA Asia-Pacific Markets. The finished steel must then be sent to factories in the U.S., pumping up the price even further.

Rising costs are starting to eat into what American managers fearfully call the China Price, the once-formidable 40% to 50% cost advantage enjoyed by Chinese manufacturers—and demanded by customers. ...

Examples of production shifts abound. Chinese steel exports to America are down 20% in the past year, notes CIBC, while U.S. steel output has jumped 10% despite the slowdown in construction. Big electronics manufacturers are expanding assembly of high-end telecommunications, computer, and medical equipment in Mexico and some parts of the U.S. for greater proximity to corporate buyers.

This is the part when all the caveats come parading on through. These trends probably don't mean a surge in U.S. manufacturing employment is just over the horizon, especially since many analysts estimate that, even with sky-high shipping costs, China will still maintain a clear price advantage for at least a decade. (Plus, there's still an economic slump going on.) But high oil prices could slow the pace of outsourcing in the short-term, and looking further ahead, it's hardly outlandish to think they could rather dramatically reshape global trade patterns.

--Bradford Plumer