Despite political pressure and proposed tax incentives, most U.S. supply chain leaders see reshoring as too costly, with many warning tariffs could tip the economy into recession.
Rising Costs Keep Reshoring Off the Table for Most U.S. Firms
A new CNBC Supply Chain Survey has found that the majority of companies are not planning to bring supply chains back to the U.S., citing prohibitive costs and persistent labor challenges. Of the 380 industry respondents, nearly two-thirds estimated that reshoring would double or more than double their current supply chain costs—prompting many to instead consider shifting operations to lower-tariffed countries.
The survey, conducted April 7–10 among members of key industry associations, paints a stark picture of the cost-benefit analysis facing logistics and manufacturing leaders. While the Trump administration has promised tax incentives and tariffs to encourage reshoring, only 14% of respondents cited taxes as the key barrier. For most, cost (57%) and a shortage of skilled labor (21%) were the dominant concerns.
A notable 61% said it would be more cost-effective to pivot supply chains toward countries not currently subject to aggressive U.S. trade penalties—rather than attempt a full-scale return to domestic production.
Tariff Policy Sparks Recession Concerns Across the Sector
Beyond the operational costs of reshoring, executives are increasingly worried about the broader economic impact of the administration’s tariff strategy. According to the survey, 63% believe that the current trajectory of U.S. trade policy will spark a recession this year, with just over half predicting a consumer slowdown by Q2.
The political tone also came under scrutiny. When asked whether they felt the Trump administration was “bullying corporate America,” 61% of respondents said yes. These sentiments reflect growing frustration among business leaders who feel squeezed between government pressure to reshore and the financial realities of global competition.
Strategy Must Trump Slogans
This survey confirms what many in the supply chain world already suspect—reshoring isn’t a quick fix, and political incentives can’t override operational economics. Directors and VPs tasked with network planning must now factor in not just tariff risk but labor constraints, infrastructure gaps, and shifting consumer demand.
The smart play for many is diversification over localization: spreading production across friendlier markets, rather than retreating to one. This is echoed in PwC’s 2024 Global Operations Pulse, which found: “Only 17% of companies believe reshoring will be financially viable within five years, unless accompanied by major automation investment.”
For now, the real reshoring movement may not be in factories, but in strategy rooms—where leaders are building more resilient, flexible, and distributed supply chains fit for the volatility ahead.
