Ready To Reshore Smarter?
Reshore Smarter
A new industry report reveals what government, original equipment manufacturers (OEMs), and contract manufacturers (CMs) must do to further accelerate and benefit from a reshore. A collaboration between the Reshoring Initiative® and Regions Recruiting®, the survey attracted over 500 respondents and offers insight into OEM and CM perceptions of barriers to manufacturing reshoring. There have been a lot of reshoring surveys in the last few years. Why this one is especially newsworthy:
- Offers alternative paths to reindustrialization if President Trump’s tariffs are permanently blocked by the courts
- Quantifies the impact each of President Trump’s reindustrialization policies would have on future reshoring. An available and skilled workforce ranks #1, beating tariffs, taxes, regulations, and currency.
- Ranks the reasons why OEMs reshored.
- Pinpoints factors that OEMs should prioritize more highly: geopolitical risk and use of total cost of ownership (TCO)
- Is the first to survey U.S. CMs, a vital part of the domestic supply chain. Identifies opportunities for them to gain orders vs. imports by achieving faster delivery and providing stronger commercial and technical partnership with the OEMs.
Conducted from February through April 2025, the survey comes at a pivotal time. As the Trump administration implements tariffs and contemplates new economic policy for U.S. manufacturing, manufacturers are navigating complex decisions about costs and planning for potential supply chain disruptions and workforce shortages.
Highlights of Reshoring That Stood Out:
On Costing
Shifting all OEMs to a full-bodied TCO system could reshore $200B of manufacturing with no government subsidies, no supply chain shock, no retaliation, and no impact on inflation after factoring in all global risks and costs. 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.
On Workforce Development
OEMs placed much higher priority on a skilled workforce than on tariffs, currency, tax rates, or regulations. Any significant reindustrialization is impossible without a national commitment to having a skilled manufacturing workforce. At current levels of productivity, 5M more manufacturing employees are required to enable the 40% output increase to eliminate the goods trade deficit. So, at least 3 or 4M more, assuming substantially higher productivity.
On Competitive Factors
When contemplating competitive factors, 52% of contract manufacturers felt that US environmental and OSHA regulations were a major factor in losing 10% or more of orders vs. imports. Since the vast majority of CMs are small businesses, this obstacle may be due to their smaller volumes and margins being unable to carry the fixed costs of adhering to regulations.
40% of OEMs were willing to pay 10% to 20% more for components if they could arrive 5 weeks earlier. 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.
On Trade and Geopolitical Risks
OEMs place a high emphasis on long-term sustainability and short-medium term profitability, rather than longer-term priorities like Environmental and Social Governance, strengthening the U.S. economy, or improving communities. It’s possible this emphasis on profitability has led to a shortfall in a well-trained and robust labor force, which requires investment and community relationships.
On Small to Midsize Manufacturers
CMs will experience greater increases in sales volumes as OEMs source more components first for current domestic assemblies and then for reshored assemblies. Of the 221 CMs who responded, 70% were small businesses with less than $25 million in annual revenue. 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.
Ready to Reshore Smarter?
Reshoring success isn’t just about bringing operations home—it’s about choosing the right location with the right advantages. From uncovering hidden tax credits to securing workforce development incentives and optimizing total cost of ownership, the right site selection strategy can be your competitive edge.
If you’re planning a new facility, expanding operations, or evaluating reshoring opportunities, now is the time to partner with an advisor who understands the full picture—optimal site, talent, incentives, cost, and speed.
Let’s make your next move your smartest one yet.
Contact us today to start building a location strategy that delivers long-term value.
Priorities for Reindustrialization: Improve Skilled Workforce, Use TCO (Total Cost of Ownership), Prep for Geopolitical Risk
Flipbook: https://heyzine.com/flip-book/90da099e8a.html#page/1
Pdf: https://reshorenow.org/content/pdf/2025_Reshoring_Survey_Report.pdf
Press Release: https://reshorenow.org/june-2-2025/
The information contained herein is general in nature and is not intended and should not be construed as legal, accounting, or tax advice or opinion provided by Ashmore Consulting LLC to the reader. The reader is also cautioned that this material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact Ashmore Consulting LLC or another tax professional prior to taking any action based upon this information. Ashmore Consulting LLC assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.