{"id":1398,"date":"2026-08-25T14:03:13","date_gmt":"2026-08-25T21:03:13","guid":{"rendered":"https:\/\/savingusmanufacturing.com\/blog\/?p=1398"},"modified":"2026-08-25T14:05:18","modified_gmt":"2026-08-25T21:05:18","slug":"the-2025-reshoring-report-shows-reshoring-is-gaining-momentum","status":"publish","type":"post","link":"https:\/\/savingusmanufacturing.com\/blog\/general\/the-2025-reshoring-report-shows-reshoring-is-gaining-momentum\/","title":{"rendered":"The 2025 Reshoring Report Shows Reshoring is Gaining Momentum"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">The long-awaited <a href=\"https:\/\/reshorenow.org\/content\/pdf\/2025_Reshoring_Survey_Report_Portrait-compressed.pdf\">2025 Reshoring Report<\/a> was published on the website of <a href=\"https:\/\/www.reshorenow.org\/\">The Reshoring Initiative<\/a> recently.&nbsp; For those of you who don\u2019t know the meaning of reshoring, it is returning manufacturing to the U.S. from being outsourced overseas, particularly to China.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For the past three decades, \u201coutsourcing\u201d aka \u201coffshoring,\u201d was the cornerstone of U.S. manufacturing. First, manufacturers outsourced to Mexico, Puerto Rico, and the Philippines.&nbsp; Then, manufacturers started outsourcing to China after China was granted Most Favored Nation status in the year 2000. &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Reshoring Initiative helps American manufacturers reshore by providing their proprietary Total Cost of Ownership (TCO) Estimator, which \u201cis a free online tool that helps companies account for all relevant factors \u2014overhead, balance sheet, risks, corporate strategy and other external and internal business considerations \u2014 to determine the true total cost of ownership.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The 2025 Reshoring Report is the first report that breaks down the evaluation of the survey responses separately for Original Equipment Manufacturers (OEMs) and Contract Manufacturers (CMs), \u201cThe 2025 Reshoring Survey was created to determine where U.S. manufacturers are with respect to reshoring and the key factors influencing those decisions.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Key Takeaways of the report:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u201cThe largest segment of \u201cOEMs use Landed Cost, which ignores about 15% of additional offshoring costs and risks as compared to TCO. A smaller number use ExWorks, which ignores about 25%.<\/li>\n\n\n\n<li>\u201cShifting 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\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0inflation after factoring in all global risks and costs.\u201d<\/li>\n\n\n\n<li>\u201cOEMs placed much higher priority on a skilled workforce than on tariffs, currency, tax\u00a0rates or regulations.\u201d<\/li>\n\n\n\n<li>\u201c40% of OEMs were willing to pay 10% to 20% more for components if they could arrive\u00a05 weeks earlier.\u201d<\/li>\n\n\n\n<li>\u201cOEMs place considerably more emphasis on engineering\u2019s proximity to manufacturing<\/li>\n\n\n\n<li>(45%) versus CMs (22%).\u201d<\/li>\n\n\n\n<li>\u201cOn the possibility of China invading Taiwan, 77% of OEMs claim to be concerned, yet\u00a0only 38% have worked with CMs to identify products to reshore as insurance.\u201d<\/li>\n\n\n\n<li>\u201cOEMs\u2019 benefits of reshoring will come significantly from reductions in risk, enhanced\u00a0customer satisfaction and improved balance sheets.<\/li>\n\n\n\n<li>\u201cCMs will experience greater increases in sales volumes as OEMs source more components first for current domestic assemblies and then for reshored assemblies.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The report was divided into responses by OEMs and CMs, so the different responses to the questions asked are noted below:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Original Equipment Manufacturers (OEMs)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When asked if they had reshored or are considering reshoring, the answers were:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>37% have not reshored nor plan to do so<\/li>\n\n\n\n<li>19% have reshored<\/li>\n\n\n\n<li>18% don\u2019t buy any imported components or parts<\/li>\n\n\n\n<li>16% are considering reshoring<\/li>\n\n\n\n<li>7% have reshoed and actively considering more reshoring<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The problem is that \u201cOnly 30% of OEMs use the <a href=\"https:\/\/www.reshorenow.org\/tco-estimator\/\">Total Cost of Ownership (TCO) estimator<\/a> in comparing domestic to offshore sourcing. 17% continue to use Ex-Works or plant level costing, and 37% use Landed Cost. 17% use some other form of costing for their suppliers. \u201c<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sadly, \u201c32% of OEMs plan to offshore some work in next 2 years. The top reasons for offshoring were cost (69%), availability of product\/components (39%), workforce availability (31%), closely followed by process knowledge, defined as how to make the product (28%).\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">China is still the main country from which companies are reshoring (34%), followed by Southeast Asia (23%, Europe (20%), Taiwan (11%) and North America, i.e., Canada (9%).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The top three reasons OEMs gave for reshoring to the U.S. were:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>45% benefit from manufacturing being located close to engineering<\/li>\n\n\n\n<li>45% reduced freight and duty costs<\/li>\n\n\n\n<li>38% avoid potential political risk<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Other important reasons mentioned were:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>28% supply chain disruptions<\/li>\n\n\n\n<li>21% Intellectual Property risk<\/li>\n\n\n\n<li>21% Robust Supply Chain<\/li>\n\n\n\n<li>17% \u201cMade in USA\u201d image of company\u2019s products<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The good news is that \u201c96% of OEMs that had reshored said they were very satisfied or somewhat satisfied with the results.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In answer to the question of how much of their products would they consider reshoring if certain conditions changed, the responses were:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>30% if there was an abundant, highly skilled workforce available in the U.S.<\/li>\n\n\n\n<li>23% if 15% tariffs were applied to all imports<\/li>\n\n\n\n<li>21% if value of USD was reduced by 15%<\/li>\n\n\n\n<li>18% if corporate taxes were reduced from 21% to 15%<\/li>\n\n\n\n<li>17% if regulations were set to match those offshore<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Contract Manufacturers (CMs)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When asked if they have reshore for their customers, the responses were:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>28% have reshored<\/li>\n\n\n\n<li>28% has not reshored<\/li>\n\n\n\n<li>14% have reshored and are actively considering more reshoring<\/li>\n\n\n\n<li>14% are quoting reshoring<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">With regard to what scenarios best fits your reshoring cases, CMs responded:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>66% of customers had been assembling end-product in U.S. and switched component sourcing from offshore to domestic<\/li>\n\n\n\n<li>34% of customers reshored assembly and sourced components domestically<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The following were the answers to the question \u201cOn what basis are most of your customers comparing offshore vs. domestic options?\u201d<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>29% Total Cost of Ownership (TCO) covering about 20 costs and risks beyond Landed Cost<\/li>\n\n\n\n<li>29% Landed Cost<\/li>\n\n\n\n<li>26% FOB, Ex Works price or plant level costs<\/li>\n\n\n\n<li>17% Other<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The report states that CMs believe that their customer reshored for the following reasons:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Quality\/Rework\/Warranty (61%)<\/li>\n\n\n\n<li>Delivery Time (54%)<\/li>\n\n\n\n<li>Less risk of] Supply Chain Disruptions (50%).<\/li>\n\n\n\n<li>Geopolitical Risk (24%)<\/li>\n\n\n\n<li>Manufacturing Near Engineering (22%)<\/li>\n\n\n\n<li>Brand\/Image Made in USA (22%)<\/li>\n\n\n\n<li>Freight and Duty (22%).<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Other minor reasons are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Section 301 Tariffs (15%)<\/li>\n\n\n\n<li>Proximity to Customers (15%)<\/li>\n\n\n\n<li>Intellectual Property risk (13%)<\/li>\n\n\n\n<li>Government incentives (9%)<\/li>\n\n\n\n<li>Automation &amp; Technology (7%)<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">I am surprised that Intellectual Property risk has dropped down to such a low percentage. When reshoring started, it was one of the top five reasons.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thus far, reshoring by CMs hasn\u2019t had much impact as \u201c47% of contract manufacturers said a very small percentage of their work has been reshored (1 to 5% of their work), while 27% responded that 6 to 20%+ of their work had been reshored.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The obstacle to more reshoring by CMs is that \u201cAs a weighted average, CMs were competing with imports on about 31% of quotes, with only 7% facing no offshore competition, and 3% competing with imports on every quote.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In addition, \u201c91% of respondents indicated that a primary reason they lost orders to imports was price.\u201d The pricing difference is substantial as \u201c68% of contract manufacturers responded that for orders they lost to imports, the import FOB price was 20 to 50+% lower than their own<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thus, it was no surprise that \u201cContract manufacturers earn 77% of their revenue from domestic customers.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The report states:\u201d CMs have lost the most business due to offshoring to China (41%) in the past two years, with India (26%) and Mexico (17%) taking the total to 84% of business lost. The remaining 16% is split between Vietnam, Taiwan, Malaysia, Germany, Sweden, Finland, Slovakia, South Korea, Japan, and Canada.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a sales representative for small American manufacturers that perform custom fabrication services, I can substantiate that the major reason we lose orders is price when competing with offshore sources. Often, the pricing is 50% lower than our domestic price and sometime equals the cost of the materials alone for our domestic company. Our competitors are nearly always Chinese companies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The report concludes with recommendations for policy makers at the national policy level that would increase reshoring.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Create a talent pipeline to improve the availability and skill of the American workforce, which is critical to reshoring and is the #1criterion for U.S. manufacturing site selection.<\/li>\n\n\n\n<li>Dramatically reduce federal loans for students seeking degrees in over-supplied fields, and shift resources to apprenticeship and trade school loans.<\/li>\n\n\n\n<li>Create a Small Business Administration (SBA) investment loan guarantee conditional on workforce development.<\/li>\n\n\n\n<li>Dramatically reduce federal loans for students seeking degrees in over-supplied fields, and shift resources to apprenticeship and trade school loans.<\/li>\n\n\n\n<li>Lower USD.<\/li>\n\n\n\n<li>Lower corporate taxes, especially continuing the expiring tax breaks for immediate expensing of capital equipment.\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">OEMs and CMs can help increase reshoring by utilizing the Total Cost of Ownership estimator instead of Landed Cost, ExWorks, &nbsp;and other rudimentary methods that fail to capture the hidden costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">More suggestions are available in the <a href=\"https:\/\/reshorenow.org\/?pageLink=blog-detail&amp;blogLink=competitiveness-toolkit-draft\">Reshoring Initiative\u2019s Competitiveness Toolkit<\/a>.\u00a0 I agree with the recommendations of The Reshoring Initiative and also made several recommendations in the chapter on Reshoring in my book, <a href=\"https:\/\/www.amazon.com\/dp\/1976430569?lv=shuf&amp;channelId=520&amp;plpRedirect=mhFallback\">Rebuild Manufactur8ng \u2013 the key to American Prosperity<\/a> available on Amazon.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We need to do whatever it takes to rebuild our manufacturing industry to ensure that we have the commercial and military\/defense products needed to keep Americans healthy and safe. Reshoring is one of the fastest ways to build back the American manufacturing industry.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The long-awaited 2025 Reshoring Report was published on the website of The Reshoring Initiative recently.&nbsp; For those of you who don\u2019t know the meaning of reshoring, it is returning manufacturing to the U.S. from being outsourced overseas, particularly to China. For the past three decades, \u201coutsourcing\u201d aka \u201coffshoring,\u201d was the cornerstone of U.S. manufacturing. First, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,6],"tags":[],"class_list":["post-1398","post","type-post","status-publish","format-standard","hentry","category-general","category-reshoring"],"_links":{"self":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/1398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/comments?post=1398"}],"version-history":[{"count":1,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/1398\/revisions"}],"predecessor-version":[{"id":1399,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/1398\/revisions\/1399"}],"wp:attachment":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/media?parent=1398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/categories?post=1398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/tags?post=1398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}