In the first and second installments of this three-part series, we examined the 2025 Reshoring Survey from the perspectives of the OEMs and contract manufacturers, respectively. In this final column, we present our industrial policy conclusions drawn from both the reshoring survey and data from the Reshoring Initiative 2024 Annual Report that, unless stated otherwise, was drawn from the Reshoring Initiative’s internal Reshoring Library, which includes more than 10,000 published articles, case studies and other verified sources.
Reshoring is central to reindustrializing American manufacturing and correcting longstanding trade imbalances. To achieve long-term success, the United States must confront two core challenges: a shortage of skilled labor and uncompetitive manufacturing costs.
In 2024, U.S. manufacturing reshoring and FDI remained strong, driven by companies seeking to shorten supply chains, reduce exposure to geopolitical risks and avoid costs associated with impending tariffs. In 2025, global supply chains are transitioning to become more resilient but also are grappling with uncertainty.
First quarter 2025 data projected a potential drop to 174,000 announced jobs for the year. However, as the tariffs started to firm and the economy stayed steady in the second quarter of 2025, the projection jumped to 220,000 by July, which was close to 244,000 in 2024. That figure could climb rapidly if firms gain full confidence in the permanence of new tariff and industrial policies. Many billions-of-dollars tentative announcements are contingent on tariffs firming.
The best way to promote more reshoring and protect the United States from increasing geopolitical risks is to implement an effective national industrial policy. Such a policy should focus broadly on leveling the cost playing field, increasing the use of Total Cost of Ownership (TCO), and providing the needed quantity and quality of workforce.
Skills shortage
The current state of the U.S. workforce is bottlenecking reshoring efforts. While manufacturing apprenticeships have increased by 83 percent over the past decade, the growing demand for skilled labor remains a major constraint to scaling reindustrialization efforts. The United States needs approximately 5 million more workers, primarily skilled, to achieve balanced trade.
The recruitment and training of high school students, changing negative perceptions of the industry, adopting more automation and expanding immigration of skilled workers to fill gaps is required to increase output, improve competitiveness and address skills shortages.
Policymakers should first address the critical need for policies and funding to support workforce training. Second, they should reduce federal loans for students seeking degrees in over-supplied fields, and shift resources to apprenticeship and trade school loans. Third, they should create a Small Business Administration investment loan guarantee conditional on workforce development.
A dramatic increase in apprenticeships is needed. We recommend the Departments of Labor and Education shift messaging away from “college for all” and toward “a good career for all.” They need to stop classifying apprentice graduates as high school grads and show the income of apprentice graduates in all charts displaying the incomes of college graduates. America also needs to graduate more engineers and incentivize the apprentice graduates to continue on to earn engineering degrees.
The success or failure of training millions of workers could skew the outcome of the U.S. reindustrialization momentum in either direction.
Cost competitiveness
The driving force of offshoring has been and still is that U.S. manufacturing costs are 10 to 50 percent higher than in almost all competitor countries. If tariffs are used to reduce foreign competition and encourage domestic manufacturing, they must be comprehensive – applied to all countries to avoid shipments that disguise Chinese exports passing through third countries.
Automation is a critical element in any reshoring strategy. Automation makes U.S. manufacturing more cost competitive, enabling more reshoring and requiring still more automation adoption, creating a virtuous cycle. Automation alone is not a panacea, but resistance to it could hinder productivity gains essential to making American manufacturing competitive. And, a much better trained workforce will be in a better position to leverage automation and new technologies that boost competitiveness.
The priorities to address high U.S. manufacturing costs are:
First, a reduction in the overvaluation of the U.S. dollar (e.g., by 20 percent) to improve cost competitiveness and drive both reshoring and more exports.
Second, a value-added tax (VAT), which decreases imports and increases exports.
Third, tariffs such as those implemented by the Trump administration, but on everything, from everywhere, forever. This reduces imports but also reduces exports, mitigating the need for tariffs altogether and supporting smarter decision-making.
To reduce the need for these actions, we encourage the government to call on all companies to use the total cost of ownership (TCO) metric when making sourcing and siting decisions. Consistent usage would drive the reshoring of about 1 million jobs.
The Reshoring Initiative’s Total Cost of Ownership (TCO) Estimator is a free online tool that helps companies account for all relevant factors – overhead, balance sheet, risks, corporate strategy and other external and internal business considerations – to determine the true total cost.
Industrial policy must be long term, coherent and grounded in measurable objectives if it is to succeed in reindustrializing the United States and balancing the trade deficit. Successful reshoring also requires an established ecosystem of suppliers and intermediaries, encompassing all steps from raw materials to finished product. More suggestions are available in the Reshoring Initiative’s Competitiveness Toolkit.
The strategies the United States implements now will shape the future of American manufacturing for decades to come. We are hopeful the current administration will consider our suggestions as it formulates reshoring strategies.
On a mission
Are you thinking about reshoring? Our main mission is to get companies to do the math correctly using our free online Total Cost of Ownership Estimator (TCO). By using TCO, companies can better evaluate sourcing, identify alternatives and even make a case when selling against offshore competitors.
Have you reshored a metal component or product? Apply for the National Metalworking Reshoring Award. The 2026 winner will be introduced at IMTS 2026.
Click here to access the full list of reshoring resources offered by the Reshoring Initiative. For help, contact me at 847-867-1144 or harry.moser@reshorenow.org.
