The Rise of Reshoring in U.S. Manufacturing: Considerations and Strategies
Published on by Travis Knight in International Business, Manufacturing
In recent years, the “Made in America” movement has seen a significant resurgence within the manufacturing industry. This revival signals not only a sense of patriotic pride but also a renewed focus on quality, resilience, and economic strength. At the heart of this shift is the growing trend of reshoring, which involves bringing manufacturing operations back to the United States.
With the manufacturing sector contributing over $2.5 trillion annually to the U.S. economy, companies are navigating increasingly complex global supply chains, evolving trade policies, and fluctuating tariffs. Amid these challenges, reshoring has become a strategic move, enabling manufacturers to regain control and reduce supply chain risks. The U.S. government is supporting this transition with incentives such as R&D tax credits, Section 179 deductions, and bonus depreciation.
While reshoring is gaining momentum across the industry, it is particularly prominent in the automotive sector. Global automobile manufacturers like Toyota and General Motors are reshoring and expanding their production of batteries and electric vehicles in the U.S., setting a strong example for others to follow.
Despite its advantages, there are several key factors to consider. First, reshoring enhances control over supply chains, which is a vital benefit in an era marked by global disruptions and trade tensions. This improved oversight helps mitigate risks and ensure continuity.
Second, reshoring offers shorter lead times. With growing consumer expectations for rapid delivery, often next-day, proximity to suppliers and production facilities offers a strong competitive edge.
Third, reshoring fosters the potential for innovation. The U.S. leads in technology-driven innovation, particularly in automation, robotics, and artificial intelligence (AI). Leveraging these advancements can boost productivity, reduce reliance on labor, and help address workforce shortages.
However, reshoring is not without its obstacles. For instance, the high upfront costs can require substantial capital investment in addition to U.S. labor markets demanding higher wages. That said, federal and state incentives can significantly offset these costs, making the move more feasible.
Another major challenge involves shifting tariff policies. To stay competitive, companies must adopt proactive strategies, including Foreign Trade Zones (FTZs) and Tariff Engineering. FTZs are designated areas near U.S. ports that allow goods to be imported, assembled, and re-exported with reduced or no tariffs. On the other hand, Tariff Engineering modifies a product’s design or composition to qualify for lower tariff rates, which can lead to considerable savings.
Despite the complexities, reshoring is a highly achievable goal for U.S. manufacturers. CPA firms can play a vital role in this process by providing services such as tax planning, cost accounting, inventory management, and financial strategy tailored to reshoring initiatives.
Reshoring presents a significant opportunity for U.S. manufacturers to strengthen their operations, mitigate supply chain risks, and limit price increases for customers. While it involves careful planning and strategic investment, the long-term benefits such as greater predictability, financial strength, and a proudly American-made product, makes it a compelling path forward.
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If you have questions on the “Made in America” movement, the Barnes Dennig manufacturing team can help. Contact us today. We will continue to publish updates about the state of the international trade environment. To stay up-to-date, subscribe to our newsletter. As always, we’re here to help.
