Dive Brief:
- A greater proportion of manufacturers are reshoring operations this year compared with 2025, according to the 2026 Reshoring Survey Report from the Reshoring Initiative and Regions Recruiting. This year, 36% of 118 OEM respondents said they had reshored or were actively engaged in reshoring, up from 29% last year.
- OEMs said their top reasons for reshoring since January 2025 were tariffs, geopolitical risks and being closer to their customers to shorten delivery times. In fact, 63% of OEMs said they plan to make capital investments in reshoring or domestic expansion.
- Manufacturers are actively reshoring and investing despite significant concerns around tariff uncertainty. A majority of OEMs, 57%, named policy uncertainty as their primary challenge, and it dwarfs other challenges — the next most common issue was market pricing and difficulty passing costs on to customers, but only 15% of OEMs identified this challenge.
Dive Insight:
Taken in isolation, the figures from the Reshoring Initiative report would indicate that tariffs and trade policy are working as intended, incentivizing manufacturers to bring production home, source domestically and avoid costly import taxes.
The reality, however, is more complex with OEMs split on whether to reshore. While 36% of manufacturers say they’re actively reshoring, another 31% of OEMs said they have no plans to reshore. The remainder are considering reshoring or said they don't import at all and have nothing to reshore.
The more than 60% of OEMs planning reshoring investments marks a change from what manufacturers and reshoring leaders have said in the recent past. Last year, executives at the Institute for Supply Management and the Reshoring Institute said the shifting nature of the tariffs halted manufacturers’ decision-making and put large capital expenditures on hold until the global trade environment stabilized.
But in this latest Reshoring Initiative report, 65% of the 118 OEMs of varying sizes that responded to the survey cited tariffs as their top reason to reshore. That's closely followed by geopolitical risk at 60%. The 131 Contract manufacturers cited the same top reasons why customers are reshoring to domestic CMs. The share of CMs quoting reshoring projects doubled to 32% this year from 16% last year, per the report.
One reason reshoring costs may seem worth the investment is that more manufacturers are considering total cost of ownership. In this year’s survey, 40% were looking at TCO, up from 30% last year. Meanwhile, 37% assess landed cost, the same percentage as in 2025. The figures indicate that with tariffs in place, many OEMs are calculating total costs to be lower if they reshore some of their manufacturing.
For those that have reshored, OEMs are mixed on whether it was the right move. The report shows 65% of OEMs that have reshored or are actively reshoring are satisfied with the results. And while that's the majority, it's significantly lower than the 96% of OEMs that said they were satisfied in 2025.
OEMs who have reshored said they were pleased with improved speed to market, better on-time delivery performance and savings on freight costs. The negative impacts they cited were higher labor and overhead costs, gaps in domestic components, and challenges with labor availability. One OEM in the cold storage industry reported that they moved procurement of glass doors from Taiwan to either Kentucky or Texas. "We have been impacted mostly by labor shortages,” the OEM said.
The issue with domestic components dovetails with a recent report by the McKinsey Global Institute, which found that domestic manufacturing would need to double on average to meet demand.
Despite an uptick in reshoring activity, OEMs remain concerned by tariffs changing with little to no notice.
Just over the last few weeks, trade tensions have escalated between the U.S and Canada, with the U.S. implementing steel and aluminum tariffs and Canada moving to impose countermeasures starting Tuesday.
The report pointed out an important distinction in that manufacturers are not calling for a specific tariff level but rather stability that makes business planning possible.
“Manufacturers can plan around a known cost; they cannot plan around a moving target,” the report stated.
Facts Only
36% of 118 OEM respondents had reshored or were actively engaged in reshoring.
36% of 118 OEM respondents reported this status, compared to 29% in the previous year.
Top reasons for reshoring since January 2025 were tariffs, geopolitical risks, and shortening delivery times to customers.
63% of OEMs plan capital investments in reshoring or domestic expansion.
57% of OEMs cited policy uncertainty as their primary challenge regarding reshoring.
Market pricing and difficulty passing costs on to customers were the next most common challenges for OEMs, cited by only 15%.
Sixty-five percent of the 118 OEMs cited tariffs as their top reason to reshore.
60% cited geopolitical risk as a top reason to reshore.
131 contract manufacturers cited the same reasons why customers are reshoring to domestic CMs.
The share of contract manufacturers quoting reshoring projects doubled to 32% this year from 16% last year.
40% of OEMs were looking at total cost of ownership (TCO), up from 30% in the previous year.
37% of OEMs assessed landed cost, the same percentage as in 2025.
65% of OEMs that have reshored or are actively reshoring reported satisfaction with the results, compared to 96% in 2025.
Negative impacts cited by those who reshored included higher labor and overhead costs, gaps in domestic components, and challenges with labor availability.
Executive Summary
A greater proportion of manufacturers are reshoring operations this year compared to the following year, with 36% of 118 OEM respondents having reshored or being actively engaged in reshoring, up from 29% the previous year. The primary drivers for reshoring since January 2025 were tariffs, geopolitical risks, and shortening delivery times to customers. Sixty-three percent of OEMs plan capital investments in reshoring or domestic expansion. Despite these actions, policy uncertainty remains a significant challenge for the majority, with 57% of OEMs naming it as their primary hurdle, followed by market pricing and cost pass-through difficulties cited by a smaller segment.
While many are investing in reshoring, the context is mixed. A portion of those who have reshored report satisfaction, citing improvements in speed to market, on-time delivery, and freight savings. However, challenges remain, including increased labor and overhead costs, gaps in domestic components, and labor availability issues. The rationale for reshoring cost-effectively appears influenced by the presence of tariffs, as many OEMs are calculating total cost of ownership with this factor included. Nevertheless, ongoing trade tensions introduce volatility, as manufacturers require stability to plan effectively, rather than moving targets based on shifting policies.
Full Take
The data reveals a tension between externally driven incentives for reshoring (tariffs, geopolitical risk) and the internal complexity of execution. While external pressures strongly push manufacturers toward domestic production, the actual decision-making process is fragmented; not all entities are equally committed to or affected by the same forces. The shift in reported satisfaction levels for those who have already reshored suggests that perceived benefits do not always align with realized outcomes, pointing toward critical gaps in supply chain integration and domestic capacity management.
The core insight lies in the discrepancy between external drivers and operational realities. Tariffs are cited as the primary motivator, yet policy uncertainty remains the leading internal obstacle for a majority of OEMs. This indicates that while cost arbitrage is powerful, predictability—the ability to plan without moving targets—is the fundamental prerequisite for significant capital deployment. The fact that those who have reshored report lower satisfaction than their 2025 peers suggests that solutions like domestic component sourcing are not seamlessly integrated; instead, they expose new constraints, such as domestic labor shortages and supply imbalances, which must be factored into total cost assessments more rigorously.
The pattern suggests a system where reactive adaptation to political risk generates investment momentum, but this momentum is tempered by unforeseen structural friction points in the domestic environment. The call for stability over specific tariff levels underscores a systemic failure in global trade governance; manufacturers require predictable rules, not just temporary cost shifts, to deploy the necessary capital confidently. This implies that future resilience depends less on unilateral policy adjustments and more on creating stable, integrated domestic ecosystems where cost management is sustainable irrespective of short-term geopolitical fluctuations.
Bridge Questions: What specific mechanisms can be established to ensure long-term policy stability for manufacturing investments? How can supply chain planning evolve to incorporate dynamic risk modeling beyond static tariff calculations? If domestic component creation requires doubling capacity, what are the necessary investment pathways to mitigate domestic labor and overhead cost increases effectively?