The 2025 Reshoring Boom: What You Need to Know

Updated April 8, 2025

After decades of overseas outsourcing, many companies are now looking to bring manufacturing operations back home to the United States. This shift is driven by a combination of economic, political, and technological factors—most notably President Trump’s announcement of new tariffs in March and April this year.  

As reshoring gains momentum, manufacturers must navigate both the opportunities and challenges that come with the transition. Who will lead the effort? Where will they go?  How will they fill labor gaps? Is this a sustainable move in the long term? 

This article explores what reshoring entails, the key drivers behind its resurgence, the main hurdles companies face, and some ways to ease the shift back to U.S. operations.  

Jump to DISHER Case Study of helping a company onshore their manufacturing >> 

What Is Reshoring? 

Reshoring, or onshoring, is the process of bringing manufacturing operations back to the United States from overseas. International outsourcing has long been the most cost-effective strategy, but shifting global dynamics are starting to make domestic production more attractive and necessary. 

Reshoring vs. Nearshoring vs. Offshoring 

While reshoring refers to relocating production back to the U.S., there are a few other supply chain terms you might be hearing a lot in these conversations.  

• Nearshoring moves operations to nearby countries like Mexico and/or Canada. In the past, this has allowed companies to benefit from lower wages and operating costs while still maintaining closer control over logistics and production schedules. But with the recent 25% tariffs on Mexican and Canadian goods not compliant with the United States-Mexico-Canada Agreement (USMCA), it may not be as lucrative of an option.

• Offshoring moves manufacturing to distant locations, often in Asia, where lower wages have historically driven production decisions—but at the cost of longer supply chains, increased lead times, and greater exposure to geopolitical risks, as we’re seeing right now.

What’s Driving the Reshoring Boom? 

Several factors are fueling the surge in reshoring.

Tariffs & Trade Regulations

The implementation of new tariffs on global imports has significantly altered cost calculations for many manufacturers. Companies that once found overseas production cost-effective are now facing higher import duties and compliance costs.

On Wednesday, April 2, 2025, President Trump imposed reciprocal tariffs targeting over 60 countries. You can view the full chart of tariff rates here. The highest rates belonged to goods from Cambodia (49%), Madagascar (47%), Sri Lanka (44%), and Vietnam (46%), but other major trade partners like China, Japan, South Korea, and India were also included.

A 25% tariff on “all foreign-made automobiles” is also in effect, and there are likely more tariff changes on the horizon. While many manufacturers and consumers are feeling the weight of these tariffs in the short-term, the Trump Administration has stated that the long-term goal is to combat trade imbalances and restore U.S. manufacturing. Hence, reshoring.

Government Incentives

The U.S. government has introduced a range of other policies aimed at strengthening domestic manufacturing. For example, the 2022 CHIPS and Science Act provided billions in subsidies to encourage semiconductor manufacturing within the U.S., and the 2022 Inflation Reduction Act offered tax credits and funding to support clean domestic energy production and infrastructure. These incentives were intended to make reshoring financially viable for companies that previously relied on offshore production. 

Geopolitical Uncertainty 

Rising tensions between the U.S. and other countries like China, Canada, and the European Union have underscored the risks of dependence on foreign suppliers. Companies that rely heavily on offshore manufacturing are exposed to potential disruptions, whether due to political instability, sanctions, or changing diplomatic relations. 

Supply Chain Vulnerabilities 

The COVID-19 pandemic exposed vulnerabilities in long and complex supply chains, leading to severe shortages, delays, and increased costs. Increasing tariffs and a looming global trade war are only increasing those vulnerabilities.

Companies are now prioritizing supply chain stability over pure cost savings, recognizing the advantages of having production closer to home. A more localized supply chain allows businesses to respond quickly to market fluctuations and reduce dependency on uncertain foreign suppliers. 

Advancements in Automation & Technology 

Slowly but surely, robotics, artificial intelligence, and smart manufacturing are reducing the labor cost gap between domestic and offshore production. With the implementation of automated assembly lines and data-driven production processes, manufacturers can increase efficiency while minimizing their reliance on large overseas workforces. 

Consumer & Corporate Pressure 

Consumers are increasingly seeking products that are “Made in the USA,” often associating them with higher quality, ethical labor practices, and environmental responsibility. Corporations are also recognizing the reputational benefits of reshoring, particularly as sustainability and social responsibility become major drivers of business decisions. 

Other Reshoring Benefits 

Aside from the driving factors listed above, reshoring can also help:  

• Create jobs and spur economic growth 

• Improve quality control with stricter policies, more frequent inspections, and quicker reactions to defects and inefficiencies 

• Reduce the significant time, costs, and carbon footprint associated with transporting goods via long shipping routes 

What It Takes to Reshore a Manufacturing Operation 

If reshoring were easy, most companies would have already done it—at least in some capacity. The fact is that, despite its benefits, bringing a manufacturing operation back to the U.S. presents several hurdles that organizations must overcome to make the effort successful.  

1. Overcome Workforce Shortages 

Arguably the top concern for many organizations is the workforce gap that comes with switching from a global crew to a U.S.-based crew. Companies like the one featured in this article are all asking, “Who’s going to do the work?” 

From highly skilled resources to general laborers, there’s a gap in available talent that makes it difficult for companies to scale their operations once onshore. Investing in workforce development, apprenticeship programs, and strategic recruiting will be crucial. 

2. Find Efficiencies to Offset Higher Operating Costs 

While automation helps offset labor costs, things like wages, regulatory requirements, and facility expenses in the U.S. remain higher than in many offshore locations.  

Companies must carefully evaluate cost structures and find efficiencies to stay competitive. Perhaps the upfront cost of new technologies and automation could pay off in the long term here. 

3. Plan for Upfront Time & Capital Investment 

Reshoring isn’t an overnight process. The upfront investment needed to secure funding, establish new facilities, and navigate regulatory approvals can be substantial, causing businesses to weigh short-term costs against long-term benefits. 

4. Realign Supply Chain Strategies 

Transitioning production back to the U.S. requires rebuilding domestic supplier networks, ensuring access to raw materials, and reconfiguring logistics strategies. Companies may also need to develop relationships with new partners to secure reliable inputs for their operations. 

How DISHER Can Help 

If you’re hoping to reshore but are stuck on how you can actually make it happen, we’re here to help.  

If workforce shortages are your main concern, our team of contract engineering and manufacturing experts can jump in and fill the gap. Based on your industry, skillset, and capacity needs, we can match you with the right people to get the job done. We also have business unit dedicated to recruiting great full-time hires.  

If project management is your main concern, we have a list of highly skilled and experienced capital project managers that would love to bring your reshoring plans to life. Whether we’re operating under a framework you’ve created or we’re building the framework ourselves, we can guide you through each challenge to ensure you reach your objective. 

Past Reshoring Success at DISHER 

Recently, we helped a client transfer their manufacturing operation from a North American country to West Michigan. They needed CNC machining, flat and tube laser processing, lath, brake forming, welding, powder coating, router table work, and light assembly processes transferred. Other details of the project scope included:  

• $10M project budget 

• 1,000 finished good SKUs 

• 600 service kits 

• 75,000 sq. ft. manufacturing space 

• 33 suppliers 

A DISHER project manager, manufacturing engineer, quality engineer, and documentation engineer worked with the customer and their suppliers to plan, execute, monitor, control, and close out the project—all on time, under budget, and free from supply chain risk. 

Reshoring can be a daunting task. If you need help, we’re ready to lend it. Get started by filling out our quick online contact form.