U.S. manufacturing is not just reshoring, it is evolving. The Reshoring Initiative in collaboration with Regions Recruiting recently conducted a comprehensive industry-wide survey to identify the key factors influencing manufacturers’ decisions to reshore factories and supply chains. This research comes at a critical time as America rebuilds its hollowed-out manufacturing base.
The U.S. manufacturing sector is at a critical inflection point. The 2020 global pandemic and its associated aftershocks were a wakeup call, exposing vulnerabilities in the U.S. supply chain due to our $1.2T goods trade deficit.
In recent years, U.S. manufacturers have begun looking beyond low-cost country sources, and are planning for supply chain risks that could cause long-term supply chain disruptions worse than those experienced during the pandemic.
Interestingly, that wakeup call also inspired companies to consider benefits beyond risk mitigation. Per the 2025 Reshoring Initiative survey results, many U.S. manufacturers are considering the collaborative power of locating manufacturing near engineering and are placing a high value on the quick delivery that is only available from local sources.
Examining what it will take to rebuild U.S. manufacturing, this article parses the results from OEMs who participated in the survey. Subsequent articles will examine U.S. contract manufacturers’ survey results and industrial policy conclusions.
What will it take?
Rebuilding the U.S. manufacturing base will require investments in automation, training and education and changing perceptions of the industry as a whole to develop a larger workforce with suitable, contemporary skills. It will also require federal policies that level the cost playing field.
The success or failure of training millions of workers could skew the outcome of the U.S. reindustrialization momentum in either direction. If the skills gap is not effectively addressed, 2.1 million manufacturing jobs could go unfilled, with an estimated loss to GDP of $1T by 2030. Continued success of reshoring would increase that shortfall to 3 million jobs or more.
In addition to a well-developed skilled workforce, successful reshoring also requires an established ecosystem of suppliers and intermediaries, encompassing all the elements in creating a product from its raw materials to the finished product.
A cohesive U.S. strategy emphasizing workforce training and recruiting, as well as supply chain innovation, will be paramount to the success of reshoring a robust U.S. manufacturing sector and crucial to maintaining national and economic security. The strategies America implements now will shape the future of U.S. manufacturing for decades to come. The Reshoring Initiative is hopeful the current administration in Washington, D.C., will consider the findings from the survey as it formulates new strategies to reindustrialize the United States.
The group consensus
The survey of 500 U.S. manufacturers found that a sufficient quantity and quality of workforce within the United States would bring back more manufacturing than any of the other options presented in the survey – including tariffs, lower value for the U.S. dollar, lower tax rates and fewer regulations.
The group consensus was that a 15 percent additional tariff applied to everything from everywhere would enable them to reshore 24 percent of what they now import. The same group believed an abundant U.S. workforce with higher skills would make that number 30 percent (see Figure 1).
The top three reasons OEMs gave for reshoring to the United States were: the benefits of having manufacturing close to engineering (48 percent), a reduction in freight and duty costs (43 percent), and to avoid potential geopolitical risk (43 percent). Proximity to customers’ market (39 percent) and mitigating supply chain disruptions (35 percent) were the next most cited reasons for reshoring (see Figure 2).
Finally, a whopping 95 percent of OEMs that had reshored said they were very satisfied or somewhat satisfied with the results (see Figure 3).
Of the OEMs surveyed, 44 percent said they either have already reshored over the last 10 years, are actively executing reshoring strategies or are currently considering reshoring. Thirty five percent have not reshored and have no plans to do so, while 20 percent are U.S. self-sustaining and procure no imported components or products.
But only 30 percent of OEMs use Total Cost of Ownership (TCO) in comparing domestic to offshore sourcing. Seventy one percent continue to use Ex-Works or plant level costing, Landed Cost or some other form of costing for picking their suppliers. But by making sourcing decisions based on the simplistic measures, they ignore the costs and risks which recognition of would cause 10 to 30 percent of imports to be sourced domestically instead.
Interestingly, when asked on average how much would they pay for components/products with a 1-week lead time versus 6-week lead time, a substantial number (42 percent) of OEMs would be willing to pay 10 to 20 percent more, a clear advantage for reshoring or nearshoring.
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. For help, contact me at 847-867-1144 or harry.moser@reshorenow.org.
Have you reshored a metal component or product? Apply for the National Metalworking Reshoring Award. The 2025 winner will be introduced at Fabtech 2025.
