Momentum is accelerating across the U.S. manufacturing sector, fueled by significant strategic investments, the adoption of emerging technologies and a reordering of global trade priorities. These dynamics are spurring renewed interest in reshoring and prompting manufacturers to rethink production strategies and capital allocation.
A major driver of this shift is the new U.S. presidential administration’s America First trade strategy. In March, President Trump released his 2025 trade policy agenda, which prioritizes U.S. production to promote high wages, job creation, innovation and national defense. Central to this agenda are aggressive tariffs developed to raise tax revenue and entice companies to build factories in the U.S. This approach is designed to strengthen domestic supply chains and reduce dependence on foreign sources, particularly for critical minerals and advanced manufacturing inputs vital to national security.
As a result, many businesses are now exploring new investments to enhance supply chain resilience and stimulate regional economic development. However, these policy shifts are also driving up input costs, introducing greater supply chain complexity and prompting retaliatory measures from major trading partners. At the same time, persistent labor shortages continue to challenge the sector’s ability to scale.
Together, these headwinds raise critical questions about whether the current wave of investment and innovation can overcome the mounting pressures of trade barriers and workforce constraints.
On April 9, President Trump announced a 90-day suspension of reciprocal tariffs for all U.S. trading partners except China, maintaining a 10% baseline tariff for most countries while keeping a 145% tariff on Chinese imports, with exemptions for select electronics. Following intensive negotiations in Geneva, the U.S. and China reached a breakthrough on May 12, agreeing to temporarily reduce tariffs for an initial 90-day period. Under the new agreement, the U.S. will lower its tariff on Chinese goods from 145% to 30%, while retaining the 10% baseline tariff for most other partners. In return, China will cut its tariffs on U.S. imports from 125% to 10% and suspend or remove retaliatory tariffs and non-tariff countermeasures implemented since April 2, such as export restrictions and investigations targeting U.S. firms. The U.S. will also roll back the additional tariffs imposed on China in early April, but all duties enacted before April 2, including those under Section 301 and Section 232, will remain in effect.
This temporary reduction does not affect pre-existing tariffs, such as those on steel and aluminum, nor does it alter the 10% baseline tariff that remains in place for most trading partners. Exemptions for smartphones, computers, semiconductors and certain other electronics from both the 145% Chinese tariff and the 10% baseline tariff continue to apply. Both governments have committed to ongoing negotiations, focused on opening up markets and potentially reducing tariffs further after the 90-day period.
While the idea of revitalizing U.S. manufacturing is gaining traction, reshoring is far from simple. Historically, the U.S. relied heavily on domestic manufacturing, but globalization shifted much of this production overseas; moving operations back domestically will be a complex and time-consuming process. Building new factories and relocating companies will require substantial investment and planning, and higher labor costs in the U.S. could lead to increased consumer prices.
Economic Opportunities for Manufacturing
Despite these hurdles, reshoring could introduce opportunities for manufacturers, such as reduced reliance on international suppliers, faster turnaround times and improved production flexibility. Companies that invest in domestic production may gain greater resilience against global supply chain disruptions, reducing their exposure to unexpected international trade disputes and geopolitical risks. While upfront costs may be higher, long-term savings supply chain efficiencies can outweigh the short-term expenses.
Recent technological advancements in AI, automation and robotics, as well as lower domestic energy costs, add to the appeal of reshoring. Manufacturers are increasingly embracing innovation to streamline operations, lower costs and elevate product quality and throughput. Investments in these technologies are expected to continue accelerating in 2025 as companies work to stay competitive.
Overcoming Challenges
Manufacturers have long reassessed their global operations since the pandemic exposed vulnerabilities in offshore production, prompting companies to seek more control over their supply chain.
Another significant hurdle is the workforce. One major challenge is addressing workforce shortages. The demand for highly skilled workers in advanced manufacturing roles continues to outpace supply. While many companies have invested in workforce development programs and automation to offset labor shortages, the challenge of attracting and retaining talent persists.
Rising global economic pressures pose an additional challenge, particularly for companies reliant on imported components. These businesses may continue to face the persistent effects of inflation, which can significantly erode their profit margins. Higher initial investments are required for reshoring operations, with infrastructure updates and labor costs posing a significant financial burden. Additionally, regulatory complexities can slow down reshoring efforts, requiring businesses to navigate compliance issues and zoning requirements.
Impacts on Facility Design and Construction
Reshoring efforts are also reshaping how manufacturing facilities are designed and constructed, pushing companies to focus their facility planning efforts on building flexible, scalable — and often, automated — spaces that can accommodate increased production capacity initiatives as well as the integration of advanced technologies to address the growing labor gap and demands.
By future-proofing facility designs, manufacturers can adapt or expand their facilities quickly — as a response to supply chain changes and pressures. Additionally, with the integration of advanced technological systems, manufacturers can enhance their operations to get product to market as quickly as possible, as well as to help solve for other industry challenges and potential for supply chain bottlenecks.
The engineer-procure-construct (EPC) approach is a strategic project delivery methodology that enhances efficiency by enabling concurrent engineering and construction activities during the project life cycle. The EPC approach also allows for adaptive design changes to meet evolving regulatory or project requirements, as well as early equipment procurement. To balance speed and cost, the EPC approach allows for innovative strategies to be applied to meet accelerated timelines and strict budget expectations.
Despite challenges, the overall sentiment within the manufacturing industry is one of cautious optimism. Companies are reviewing their sourcing and production strategies, and while hurdles like worker shortages and high short-term costs remain, U.S. manufacturers may find opportunities for growth in 2025.
Editor’s note: This post was originally published April 1, 2025, and has been updated for context and accuracy.