The global manufacturing landscape is undergoing a fundamental shift. In recent years, reshoring — at times discussed more conceptually than executed in practice — has evolved into a strategic response to a range of complex international risks, including tariff unpredictability. While traditional motivations for reshoring focused on customer proximity and supply chain agility, recent developments in the first Trump administration, particularly Section 232 tariffs on steel and aluminum and Section 301 tariffs on goods from China, were already leading some companies to re-evaluate their long-term supply chain strategy. But with the second Trump administration turbocharging new tariff proposals — and applying them to every country in the world — it has become increasingly vital for manufacturers to reevaluate their global sourcing and production strategies.

This article examines the evolution of reshoring as a business strategy, explores the current drivers of reshoring initiatives, and outlines the key advantages and disadvantages for manufacturers considering domestic investment in response to ongoing tariff uncertainty.

The Evolving Rationales for Reshoring

In the early 2010s, reshoring began gaining momentum among manufacturers seeking to reduce lead times, better serve regional markets, and improve supply chain responsiveness. Although these efforts often were driven more by operational considerations than trade policy, many of the advantages of reshoring still are considerations today:

• Customer Proximity: Manufacturers sought to reduce transportation costs and delivery times by locating production closer to key markets.
• Time-to-Market Pressures: In sectors with rapid product cycles, reshoring enabled more responsive production and reduced the risk of obsolescence.
• Inventory Optimization: Domestic production allowed companies to shift toward just-in-time models, reducing warehousing requirements.
• Advances in Automation: As automation technologies improved, the labor cost differential between offshore and onshore manufacturing narrowed, making domestic production more competitive.

These early trends positioned reshoring as a tool for improving supply chain performance, particularly in high-value or customized product segments. The Section 301 tariffs imposed during the first Trump administration, however, added additional tariff-related costs and uncertainty to the calculus for offshore manufacturing in China and using Chinese parts and components. Initially targeting $50 billion in Chinese imports in response to intellectual property and trade imbalances, these tariffs expanded to cover more than $350 billion in annual imports, thereby sharply raising the inducement for companies to look at reshoring as a way of diversifying their supply chains away from China.

Soon thereafter, currency volatility and inflationary pressures created new challenges for global procurement, with the Russian-Ukraine war exposing further strains on international supply chains. With offshore costs becoming more difficult to forecast, and with tariff increases and unpredictability becoming dominant costing considerations, manufacturers increasingly turned to domestic operations as a way to gain greater cost predictability.

In 2025, the return of an even more aggressive tariff policy under the second Trump administration introduced a new phase of uncertainty. The first six months of the Trump administration saw over sixty tariff proclamations, which would be a century’s worth of tariff changes under any other administration. Expanded tariffs included 10% global tariffs, reciprocal tariffs raising the ante up to 50%, a host of Section 232 sectoral tariff investigations on a variety of products, and the use of quickly imposed tariffs to create “negotiating leverage” with foreign governments.

For manufacturers, the implications of this policy shift are significant:

• Unpredictable Implementation: The speed and breadth of new tariffs have made long-term planning more difficult for businesses relying on complex global supply chains.
• Sector-Specific Targeting: Strategic industries, including semiconductors, clean energy, and critical minerals, have faced intensified scrutiny, complicating sourcing and investment decisions.
• Political Volatility: With tariff policy increasingly driven by election cycles and political signaling, businesses face heightened regulatory unpredictability that is difficult to hedge through traditional means.

As a result, many manufacturers now view reshoring not as a discretionary strategy — but rather a necessary tool to manage risk. Given the escalating risks associated with overseas manufacturing, reshoring offers several strategic benefits for companies looking to enhance operational stability and protect against future trade disruptions:

• Reduced Tariff Exposure. With new tariffs targeting all countries rather than just China, producing domestically is the only reliable way to avoid tariff uncertainty.
• Improved Supply Chain Control. Customs & Border Protection is increasing its focus on supply chain integrity, particularly regarding forced labor, human trafficking, and the Uyghur Forced Labor Prevention Act (UFLPA). Domestic supply chains mitigate the potential regulatory and reputational risk associated with international sourcing.
• Enhanced Risk Resilience: Localizing production strengthens a company’s ability to withstand global disruptions, including geopolitical conflict; foreign, economic, and tariff-related policy shifts; natural disasters and pandemics; and transportation or supply chain disruptions.
• Access to Incentives: Federal, state, and local governments are increasingly offering financial and regulatory incentives for domestic investment, including tax credits, infrastructure support, workforce development programs, and expedited permitting.