A growing number of manufacturers are reshoring at least a part of their operations to the U.S. or making plans to do so. But they still face significant hurdles, in the form of uncertainty over government trade policy and workforce availability.
First, the good news for American industry. As of this year, 36% of U.S. original equipment manufacturers have either reshored some production or are activity engaged in that effort, up from 29% in 2025. And the share of contract manufacturers taking similar action has risen from 16% to 32%, with 79% reporting that at least some of their customers had “discussed” reshoring in the prior year.
Those numbers come from the 2026 USA Reshoring Survey, conducted by the Reshoring Initiative and Regions Recruiting and polling 249 manufacturers, including 118 OEMs and 131 CMs. The survey’s approach, according to Reshoring Initiative founder and president Harry Moser, was to ask, “Have you reshored, why, are you happy, and what makes you bring back more [production to the U.S.]?”
Manufacturers responding positively to any of those questions cited risk arising from geopolitical turmoil, including high tariffs and other trade restrictions, as a major consideration in their sourcing strategies. Fifty-three percent of surveyed CMs said that’s driving customers to seek domestic suppliers, up sharply from 24% in 2025. And 60% said importers from China or Taiwan “were at least discussing” reshoring as a means of mitigating risk.
Moser says the Reshoring Initiative’s own annual report, based on a library of some 8,000 cases of reshoring and foreign direct investment in the U.S., traces the same trend in even more dramatic fashion. It finds the number of new jobs resulting from such actions growing from 11,000 in 2010 to an expected 330,000 this year.
As a business strategy, reshoring is seen as more than reactive in nature. The new survey identifies a number of operational benefits, with 70% of OEMs citing greater speed to market, 65% improved fulfillment or on-time delivery, and 60% logistics savings.
Hurdles to increased reshoring remain firmly in place, however. Ironically, the same geopolitical tensions that motivate manufacturers to shift production back to the U.S. are also serving to curb those efforts. Shifting U.S. trade policies and fluctuating tariff levels sow uncertainty and undermine long-term commitments to greater investment in American plants.
“Manufacturers can adjust to known costs and opportunities,” Moser says. “What is much harder to manage is a moving target. The survey shows that reshoring interest and investment are there, but companies need greater predictability to commit capital and develop supply chains for the long term.”
Another strong disincentive to reshoring — and one that troubles manufacturing across the board — is workforce availability. Sixty-six percent of survey respondents described the hiring of technicians such as welders, machinists and electrical and chemical engineers as “very difficult or at crisis levels.” And 60% cited the same challenge in securing maintenance and repair technicians.
As incentives for bringing back production, U.S. manufacturers rank having an adequate supply of labor well above tariff and tax cuts, deregulation and a cheaper dollar, Moser says. “They’re saying, ‘You don’t have to subsidize us. Just give me the kind ofworkforce I need in quantity and quality.’”
Survey co-author Regions Recruiting has been hearing from clients over the past two years about a “critical shortage level” of technicians, says Kathy Nunnally Anemogiannis, president and owner of the manufacturing executive search firm. OEMs and CMs are beating the bushes for fresh talent in trade schools, vocational schools and especially community colleges. Traditional four-year universities rank last as sources, she says.
The recent wave of immigrant deportations is further disrupting the manufacturing labor pool. Sixty-four percent of surveyed CMs said it was hampering efforts at recruiting, and leaving “voids” in roles that would normally have gone to experienced immigrant workers, Anemogiannis says.
Automation is frequently cited as the answer to the shallow human labor pool in the U.S. — not to mention a more efficient replacement for people who are already in the plant. Anemogiannis says that doesn’t eliminate the need for technical skillsets of human workers. Moser notes that between 20% and 30% of surveyed producers believe artificial intelligence and automation will erase the cost disparity between U.S. and offshore production by 2040, while “others said that alone would not be enough to make us competitive.”
One notable shift in sourcing trends is the stated desire of OEMs and CMs to be geographically close to product engineering and design. In the early days of offshoring to China and other low-cost countries, many manufacturers claimed that the coming of the internet allowed the design function to be located anywhere in the world, far from the physical plant. That, evidently, is no longer entirely the case. In the minds of today’s producers, complications arising during the engineering and product development stages are better addressed by bringing collaborators closer together, Anemogiannis says.
Ultimately, the decision to reshore depends on a complex calculation incorporating multiple inputs. In addition to labor, elements that go into figuring the total cost of ownership include duty, freight, tariffs and the carrying cost of inventory, not to mention the less tangible value of serving customers closer to end markets. But according to the survey, only about 30% of OEMs are currently using that methodology, says Moser. “There’s a huge opportunity just to do the math correctly.”