The 2025 USA Reshoring Survey of 500 U.S. manufacturers, a collaboration between the Reshoring Initiative and Regions Recruiting, concluded that a sufficient U.S. workforce would bring back more manufacturing than any of the other surveyed options.
The survey was designed to glean three key insights: First, why OEMs decided to reshore; second, to understand the perspective of contract manufacturers (CMs) in the OEM supply chain; and third, to understand the actions needed to increase the rate of reshoring.
The primary driver. The top trigger for increased reshoring has been a larger skilled workforce available in the U.S. Given that, OEMs would reshore 30% of their products currently offshored. Other changes — 15% tariffs, a 15% reduction in the value of the USD, a 6% corporate tax cut, and altered U.S. regulations — led OEMs to say they would reshore 23%-17% of offshored products. A failure to train workers could harm U.S. reindustrialization momentum. Without a surge in reshoring, 2.1 million manufacturing jobs are forecast to go unfilled by 2030, with an estimated loss to GDP of $1 trillion. Continued reshoring success would increase that shortfall to 3 million or more.
Shifting OEMs to TCO. Only 30% of OEMs use total cost of ownership (TCO) in comparing domestic to offshore sourcing. Seventeen percent use Ex-Works or plant-level costing, 37% use landed cost, and 17% use some other form of costing. Often, these methods result in a 20-30% miscalculation of actual offshoring costs.
Shifting most OEMs to a TCO system would reshore $200 billion of manufacturing without government subsidies, supply chain shock, retaliation, or impact on inflation after companies factored in all global risks and costs. Data on 190 cases comparing China to the U.S. showed the U.S. win rate going from 8% based on price to 32% based on TCO.
Also, U.S. manufacturers are reevaluating sourcing strategies beyond low-cost countries and planning for supply chain risks. The survey results reveal that many manufacturers are considering the collaborative benefits of locating manufacturing near engineering and quick deliveries.
Proximity of manufacturing, etc. 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%). OEMs place 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.
Forty percent of OEMs were willing to pay 10% to 20% more for five weeks faster delivery. This premium for shorter lead times points to a great opportunity for CMs.
Considerations for OEMs. OEMs’ reshoring benefits will come from risk reduction, enhanced customer satisfaction, improved balance sheets, and volume increases from increased market share.
Localizing production and sourcing will reduce geopolitical risk and make supply chains more resilient and sustainable, encourage investment in infrastructure and workforce development, strengthen the U.S. economy and generate well-paying jobs in manufacturing.
Many multinationals headquartered in the U.S. and 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. Seventy-seven percent of OEMS are concerned about the risk of a Chinese invasion of Taiwan, yet 51% have not identified products to reshore as insurance. The best way to avoid these risks is by reshoring or nearshoring.
The best way to increase the rate of reshoring and protect the U.S. from increasing geopolitical risk is to implement an effective national industrial policy focused on leveling the cost playing field, providing the needed quantity and quality of workers, reducing regulations and allowing for immediate expensing of capital investments such as automation.
