Why US reshoring will fail for some products, and where it pays
Reshoring is not failing everywhere. The 2026 survey data shows where it stalls, on price, people, parts and policy, and where speed, freight and inventory make it pay.
Filed under How a program runs
Short answer: US reshoring will fail for products where the price gap is wide, the work is labor-heavy and the parts still come from Asia. It pays where speed, freight, inventory and quality cost more than the labor saved. The way to know which side your product is on is a total-cost comparison, not a unit-price quote.
Search for why US reshoring will fail and you will find two camps talking past each other. One says tariffs will bring the factories home. The other says American labor and supply chains cannot compete, so it is all talk. Both are wrong for most individual products. The useful question is narrower: for this part, at this volume, does moving production to the US lower what it costs you to sell it? This note uses the newest survey data from US manufacturers to show where reshoring is stalling, where it is working, and how to run the numbers for your own product.
What the data actually says
The Reshoring Initiative counts announced jobs from companies that move production to the US or foreign companies that build here. Its 2024 annual report shows that "244,000 U.S. manufacturing jobs were announced in 2024 via reshoring and foreign direct investment (FDI)." Its December 2025 update projected "approximately 240,000 jobs will be announced in 2025, down by about 7% from 2024." Announcements are plans, not output, but the trend is steady rather than collapsing.
The more telling numbers are in the 2026 USA Reshoring Survey, which asked 249 US manufacturers, 118 original equipment manufacturers (OEMs) and 131 contract manufacturers, how it is going. More OEMs are doing it: 36% said they had reshored or were actively reshoring, up from 29% in 2025. Fewer are happy with the result. The survey reports that "65% of OEMs report being satisfied with reshoring results in 2026, down from 96% in 2025, with dissatisfaction rising to 25% from just 4%." The authors say this "doesn't suggest reshoring itself is failing," and point to first-year problems: "labor costs, vendor gaps, inflation, and general implementation and adjustment pains."
So the honest answer is not that reshoring fails. It is that it fails for some products and some companies, and the survey says fairly clearly which ones.
Why US reshoring fails: four reasons from the survey
1. The price gap is still wide. When US contract manufacturers lose a job to an import, they named price as the main reason 94% of the time. The survey adds that "50% of CMs who lost orders say the winning import FOB/Ex-Works price was 30% or more below their own." Asked how much US costs would have to fall to reshore 30% of imports, the most common answer among those who could estimate was a 21-50% reduction.
2. There are not enough skilled people. Two-thirds of respondents rated hiring technicians such as welders, machinists and electrical techs as very difficult or worse, and 60% said the same of maintenance and repair techs. Deloitte and The Manufacturing Institute estimate that US manufacturing could need around 3.8 million new employees between 2024 and 2033 and that "around half of these open jobs (1.9 million) could remain unfilled." Only 33% of respondents believe AI and automation will make US production competitive enough to cut imports in half by 2040.
3. The supply base is not here yet. Moving final assembly does not move the parts. Among OEMs that reshored, 35% cited "domestic component gaps" as a negative. One contract manufacturer told the survey that the "majority of mold components are produced in China. Tariffs only increased our cost to make in-house and did not make us more competitive." Most reshoring is partial: 69% of contract manufacturers' reshoring cases were a customer switching component sourcing only, with assembly already in the US.
4. Nobody can plan around moving rules. 57% of OEMs named "policy uncertainty (tariffs changing with little/no notice)" as their primary challenge with trade policy, far ahead of anything else. A factory is a long-term decision, and a tariff that changes by announcement is a weak foundation for one. The survey notes that a February 2026 Supreme Court ruling ended the IEEPA tariffs and that 64% of respondents reported no change to their factory or reshoring timelines because of it.
Where reshoring pays
The same survey shows the side that works. Among OEMs that reshored, the most common positive results were faster speed to market (70%), better on-time delivery (65%), freight and transit savings (60%) and lower inventory carrying cost (40%). One consumer goods company said: "Previously we had to front 3-4 months worth of inventory at once. Now our customers can order on demand and have a much lower capital outlay."
In our experience that points to a recognizable profile. Reshoring tends to pay when several of these are true:
- The product is heavy or bulky for its value, so ocean freight and warehousing are a large share of what it costs to land.
- Labor is a small part of the cost. Highly automated processes travel well; hand assembly and sewing do not.
- Demand changes fast, so holding three or four months of inventory in transit is expensive or risky.
- Quality failures are costly to fix at a distance, and the engineering team needs to be near the line.
- The parts are already available domestically, so moving assembly does not leave you importing every component anyway.
It tends to fail when the opposite is true: a light, labor-intensive product with stable demand, many purchased components and a buyer who chooses on price.
Run the numbers before you decide
The survey's strongest recommendation is to compare total cost of ownership (TCO), not unit price. Adoption is growing: 40% of OEMs now use TCO, up from 30%, while 37% still compare landed cost and 12% compare factory-gate price only. A factory quote leaves out most of what decides the answer. For each option, line up:
- Unit price at your real volume, with the tooling quoted separately.
- Freight, insurance and customs brokerage to your warehouse.
- Duty under the current rate for your HTS code, and how exposed you are if that rate changes.
- Inventory in transit and safety stock, at your cost of capital.
- Quality: inspection, rework, returns and the cost of a bad lot found late.
- Travel, engineering time and the time to get a design change into production.
Our tariff savings calculator handles the duty side of that list, and the tariff math note works through one product line by line. For molded parts, tooling is often the single largest number; the injection mold cost note explains what drives it.
The middle option: move it, but not home
Many companies that cannot make the US numbers work still want out of a single-country supply chain. In the survey, 60% of contract manufacturers said their typical customers who import from Asia are at least discussing de-risking, but only 19% said those customers are actively moving away. For a product where labor matters, the realistic move is often to another Asian country rather than to the US, or to split the work: tooling and labor-heavy steps offshore, final assembly, kitting or customization close to the customer.
A vetted partner factory network is one of those options for precision tooling, molding and electronics, and origin can change the duty on many products. Our partner factory network page covers how JCH works with factories.
How JCH fits
JCH Design & Manufacturing helps US companies make products at vetted partner factories that Jack Cheng, the principal, has visited and qualified. JCH does not own those plants. If the total-cost math says a product belongs in the US, we will tell you that, and if part of it does, we can make the rest. Send a drawing, a photo or a current quote through the contact page and we will compare the options against your real numbers.
Straight answers
Why will US reshoring fail?
It fails for products where the price gap is wide and the work is labor-heavy. In the 2026 USA Reshoring Survey, US contract manufacturers named price as the main reason they lose jobs to imports 94% of the time, two-thirds of respondents called hiring skilled technicians very difficult, and 57% of OEMs named policy uncertainty as their main trade challenge.
Is reshoring actually happening?
Yes, but unevenly. The Reshoring Initiative counted 244,000 reshoring and foreign direct investment jobs announced in 2024 and projected about 240,000 for 2025. In its 2026 survey, 36% of OEMs said they had reshored or were actively reshoring, up from 29% a year earlier.
Are companies happy after reshoring?
Less than before. The 2026 survey found 65% of OEMs satisfied with reshoring results, down from 96% in 2025, with 25% dissatisfied. The most common positives were faster speed to market, better on-time delivery and freight savings; the most common negatives were higher labor costs and gaps in domestic components.
What products make sense to reshore?
Products that are heavy or bulky for their value, use little labor, have fast-changing demand, are costly to fix when quality fails, and whose parts are already available in the US. Light, labor-intensive products with stable demand and many imported components usually still cost less to make offshore.
How do I compare US and overseas manufacturing costs?
Use total cost of ownership, not unit price. Add tooling, freight, duty, inventory in transit, inspection and rework, and engineering time to each quote. The 2026 survey found 40% of OEMs now use total cost of ownership, up from 30% a year earlier.
How this note was made: researched and drafted with AI assistance, checked against the sources listed below and edited at JCH Design & Manufacturing.