Geopolitical shifts, rising costs, and sustainability goals are accelerating nearshoring and split-shoring strategies, reshaping global supply chain dynamics.
Nearshoring Gains Momentum Amid Incentives
Businesses are actively relocating supply chains closer to home, with 80% of executives planning near-market operations and 64% already investing in nearshoring or split-shoring, according to a recent survey. Key drivers include geopolitical turbulence, increased costs in China, sustainability pressures, and incentives from governments like the U.S. to boost domestic manufacturing in sectors such as clean energy, semiconductors, and electric vehicles.
Years of supply chain disruptions have forced companies to transform operations to remain cost-competitive, resilient, and sustainable while addressing evolving market demands. The trend reflects a shift from questioning the need for change to determining how to implement these strategies effectively.
Tariff Policies Threaten to Complicate Plans
Despite growing interest in nearshoring, the possibility of new U.S. tariffs under the incoming administration could disrupt plans. Proposed tariffs include 60–100% on Chinese imports and 25% on Mexican imports, potentially deterring businesses from further investment in Mexico.
Since 2019, foreign investments in Mexican manufacturing have risen 20% annually, with companies from Europe, Canada, and Asia drawn to the country’s low labor costs and proximity to U.S. markets. However, changes to trade policies may challenge the advantages that have made Mexico a nearshoring hotspot, requiring businesses to recalibrate their strategies.
While nearshoring offers opportunities for greater efficiency and resilience, evolving trade policies and geopolitical uncertainties add complexity. Supply chain leaders must weigh the risks and rewards carefully as they adapt to a changing global landscape.
