In the July/August issue we discussed the Reshoring Survey responses collected from the American Foundry Society’s readers, a subset of the national Reshoring Survey. In this issue we will review the responses, conclusions and recommendations drawn from the full national 2025 USA Reshoring Survey, a collaboration between the Reshoring Initiative and Regions Recruiting. The national survey accumulated results from 500 U.S. manufacturers including Contract Manufacturers (CMs/55%) and Original Equipment Manufacturers (OEMs/45%).

The Reshoring Survey revealed the fundamental building blocks needed for U.S. reshoring and reindustrialization: lower costs; a larger, more highly skilled workforce; use of Total Cost of Ownership (TCO) when comparing domestic to offshore sourcing; and preparation for geopolitical risk. These are the economic imperatives needed for American reindustrialization—full stop.

Barriers to U.S. Reindustrialization

TARIFF UNCERTAINTY. Tariffs may be uppermost in our collective minds but they are not, so far, a major driver or incentive for increased U.S.-based sourcing or manufacturing. Although tariffs are encouraging some companies to site more manufacturing in the U.S., tariff uncertainty is discouraging reshoring overall. Without a stable, long-term policy framework, companies are hesitant to make irreversible commitments to increased U.S. manufacturing.

If tariffs are to be used, we would rather see a more modest 10%–15% tariff firmly instituted on a long-term basis, for example, 10 years and approved by Congress so that companies feel confident making investments. So far, the tariffs have slowed down the rate of reshoring as some companies put the brakes on until they find out what the reality is going to be. At the end of April 2025, the Reshoring Initiative forecast reshoring and FDI-announced jobs to fall off significantly in 2025, to 174,000 jobs from 244,000 in 2024. Our forecast has picked up to 223,000 as of June 2025 as tariffs have firmed. Further firming will accelerate reshoring.

SKILLED LABOR SHORTAGE. The survey confirmed that the skilled labor shortage is a significant barrier to foreign direct investment (FDI) and reshoring efforts. Evidence suggests that factory startup and expansion projects in the U.S. have experienced delays because of difficulties in finding skilled workers.

MANUFACTURING COSTS. Another serious barrier is U.S. manufacturing costs. The manufacturing cost in the U.S. is about 50% higher than China and about 10%–20% higher than almost all other developed countries in the world. This makes the U.S. extremely uncompetitive, and if that problem is not addressed, companies will continue to go abroad. With that said, let’s discuss the fundamental components needed for U.S. competitiveness, profitability, and sustainability.

Three main Takeaways

The survey was designed to identify three key takeaways: No. 1: Determine the strategy or why OEM reshored. No. 2 to comprehend the perspective of the CMs in the OEM supply chain. No. 3: To gain a meaningful understanding of the actions needed to increase the rate of reshoring. Let’s jump in.

The Driving Force Behind Increased Reshoring & Reindustrialization

The Reshoring Survey results concluded that a sufficient quantity and quality of U.S. workforce would bring back more manufacturing than any of the other surveyed options including tariffs, a lower U.S. dollar, lower tax rates, or fewer regulations.
The power source for increased reshoring is a stronger, skilled workforce in abundant supply in the U.S. Given that resource, OEMs would reshore 30% of their products currently offshored.

If 15% tariffs were applied to all imports from all countries, OEMs said they would bring back 23% of what they currently offshore. This was followed by a 15% reduction of the USD (21%), corporate tax rate cuts from 21%–15% (18%), and U.S. regulations set to match those offshore (17%). Companies understand they need more workforce quantity to increase output and better training to improve competitiveness.

A prominent example is TSMC’s Arizona Chip Factory, which delayed its first fab opening from 2024 to 2025, and a second stage until 2027 or 2028, explicitly citing “labor issues” and a shortage of skilled construction workers, technicians, and engineers. Other companies like Intel and Micron have also emphasized the critical need for a strong pipeline of skilled talent for their massive expansions.

Robust Tco System Would Reshore Billions 

Just 30% of OEMs use Total Cost of Ownership (TCO) in comparing domestic to offshore sourcing. Seventeen percent continue to use Ex-Works or plant level costing, and 37% use Landed Cost. Seventeen percent use some other form of costing for their suppliers. Frequently these methods result in a 20%–30% miscalculation of actual offshoring costs.

The Reshoring Initiative’s Total Cost of Ownership (TCO) Estimator (https://reshorenow.org/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 of ownership.

If the majority of OEMs shifted to an efficient TCO system, the U.S. would reshore $200 billion of manufacturing with no government subsidies, no supply chain shock, no retaliation, and no impact on inflation after companies factored in all global risks and costs. By using TCO, instead of the partial measures of cost and risk, OEMs can both increase profitability and benefit all stakeholders.

Top Reasons for Reshoring

The survey results revealed why many manufacturers are considering the collaborative benefits of local for local. Specifically: the benefits of locating manufacturing near engineering and the fast delivery achieved by localization strategies.

Proximity of Engineering to Manufacturing

The top three reasons given to reshore were locating manufacturing near engineering (45%), the benefit of reduced freight and duty costs (45%), and avoiding geopolitical risk (38%). The OEMs place considerably more emphasis on engineering’s proximity to manufacturing (45%) versus CMs (22%). This differential suggests CMs have an opportunity to demonstrate their capabilities as trusted technical solutions partners to the OEMs. 

Five Weeks Faster Delivery 

Forty percent of OEMs were willing to pay 10%–20% more for five weeks faster delivery. By working with domestic suppliers, manufacturers can receive inputs faster, minimizing downtime and accelerating the manufacturing process. This premium for shorter lead times points to a great opportunity for CMs. Typical delivery time by surface freight from inland China/Asia to the Midwest is about six weeks.

Other key takeaways
Details on these results are available in the full report: https://bit.ly/Reshoring-Report
•    95% of OEMs were fully or somewhat satisfied with the results of their reshoring.
•    The biggest sources of reshoring were first China, second Southest Asia
•    31% of OEMs said their business would be severely or moderately negatively impacted if all illegal immigrants were deported.
•    32% of OEMs were still planning to offshore, primarily driven by cost and availability of products or components.
Recommendations for OEMs

OEMs should consider reshoring to mitigate the risks of the current international trade and tariff situation. Many multinationals headquartered in the U.S. and in allied countries produce in China to supply the U.S. market. Shipments to the U.S. from these factories could take multiple hits: China export bans, U.S. tariffs, and Taiwan-related geopolitical risk. The best way to avoid these risks is to supply the U.S. by reshoring or nearshoring.

Recommendations for CMs 

Contract manufacturers are encouraged to utilize Total Cost of Ownership as a sales tool. Contract Manufacturers can then use TCO to make a case with customers when competing with offshore competitors. Based on responses, OEMs are open to moving to domestic CMs for faster deliveries, reduced freight and duty costs, lower geopolitical risk higher quality products, and increased collaboration with engineering teams.

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) at https://www.reshorenow.org/tco-estimator/

By using TCO, companies can better evaluate sourcing, identify alternatives and even make a case when selling against offshore competitors. To report your reshoring successes or to get help with reshoring, contact Harry Moser, at the Reshoring Initiative: harry.moser@reshorenow.org, 847-867-1144.