The 2025 USA Reshoring Survey of 500 U.S. manufacturers, a collaboration between the Reshoring Initiative and Regions Recruiting, reached an actionable conclusion. A sufficient quantity and quality of U.S. workforce would bring back more manufacturing than any of the other surveyed options — tariffs, a lower U.S. dollar, lower tax rates or fewer regulations.
The survey was designed to glean 3 key insights: first, to understand the decision-making process or the “why” behind Original Equipment Manufacturers (OEMs) reshoring; second, to understand the perspective of contract manufacturers (CMs) in the OEM supply chain; and third, to acquire a deeper understanding of the actions needed to increase the rate of reshoring. The survey revealed the priorities for America’s reindustrialization as: level the cost playing field, a larger skilled workforce, use TCO and prepare for geopolitical risk. Let’s dig deeper.
The Primary Driver for Increased Reshoring
The top trigger for increased reshoring was having a larger, stronger skilled workforce available 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% to 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.
The success or failure of training millions of workers could skew the outcome of the U.S. reindustrialization momentum in either direction. Even 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 success of reshoring would increase that shortfall to 3 million or more.
Successful reshoring also requires an established ecosystem of suppliers and intermediaries encompassing all steps, from raw materials to finished product.
Shifting OEMs to TCO Would Reshore Billions of Dollars
Only 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 (Figure 2).
Often, these methods result in a 20 to 30% miscalculation of actual offshoring costs. 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 of ownership.
Shifting the lion’s share of OEMs to a full-bodied TCO system 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 less complete measures of cost and risk, OEMs can both increase profitability and benefit all stakeholders. 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.
Contract manufacturers (CMs) can use TCO to make a case with customers when competing with offshore competitors. For example, Morey Corp., an Illinois-based electronics CM, reported that TCO was the key to winning a $60 million order when competing against a lower-cost Chinese competitor.
An Inflection Point—Prepare for Geopolitical Risk
The U.S. manufacturing sector is at a critical juncture. The 2020 global pandemic and its associated aftershocks exposed vulnerabilities in the U.S. supply chain due to our $1.2 trillion goods trade deficit.
U.S. manufacturers are reevaluating sourcing strategies beyond low-cost countries and planning for supply chain risks that could cause long-term disruptions worse than those experienced during the pandemic. The survey results reveal that many manufacturers are considering the collaborative benefits of locating manufacturing near engineering (Figure 3), and are placing a high value on the quick delivery achieved by localization strategies (Figure 4).
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.
Percentage Premium for a One-Week Delivery
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. Typical delivery time by surface freight from inland China/Asia to the Midwest is about 6 weeks. Presumably, the benefit comes from much smaller inventories and better availability.
