With tariff uncertainty and rising costs, long-term decision making is difficult and more and more manufacturers are moving operations closer to home.
According to the Reshoring Initiative and Regions Recruiting 2026 Reshoring Survey Report, 36% of the 118 OEM respondents indicated that they have already reshored operations or are currently in active reshoring efforts. That was up from 29% last year.
The survey also shows that manufacturers are eager to invest in domestic production. Since January 2025, tariffs, geopolitical risks and the need to be closer to customers to shorten delivery times have been the main drivers for reshoring decisions. Overall, 63% of OEMs said their capital investment plans are connected to reshoring or domestic expansion.
This new momentum does not mean that uncertainty disappears. Uncertainty around policy remains the biggest concern for the industry, with 57% of OEMs citing this as their biggest challenge. The problem is far more serious. The second most cited challenge was market pricing and the inability to pass on increased costs to customers, at only 15% of respondents.
At first glance, the numbers could be seen as tariffs and trade policies working as intended: to encourage manufacturers to bring production home, boost domestic sourcing and limit exposure to expensive import taxes.
But the picture is not that simple.
Thirty-six percent of manufacturers say they are actively reshoring, and 31% of OEMs said they have no plans to bring operations back domestically. The other respondents are either considering reshoring or they do not import products and therefore have no operations to bring back.
However, the fact that more than 60% of OEMs are planning reshoring-related investments is a significant departure from the stance expressed by manufacturers and reshoring leaders in recent years.
Last year, executives from the Institute for Supply Management and the Reshoring Institute said the evolving tariffs had delayed manufacturers’ decision-making. Companies often hold back on big capital investments, waiting for a less volatile global trade environment.
The latest Reshoring Initiative report indicates manufacturers are more willing to move forward despite those uncertainties.
Some 75% of the 118 OEMs of all sizes surveyed said tariffs were their number one reason for reshoring. Third was geopolitical risk, at 60%.
Contract manufacturers saw the same. Among 131 contract manufacturers polled, tariffs and geopolitical risks were the top reasons cited by customers surveyed for seeking domestic manufacturing partners. Meanwhile, the share of contract manufacturers quoting reshoring projects more than doubled year over year to 32% in 2026, from 16% in 2025.
One reason reshoring investments may seem more attractive is the greater focus on total cost of ownership.
Some 40% of manufacturers surveyed said they were evaluating total cost of ownership this year, up from 30% last year. Landed cost was 37%, unchanged from 2025.
The numbers suggest that with tariffs now part of the business equation, more and more OEMs may be finding that the total cost of manufacturing is more competitive if they reshore part of their production.
But the results are mixed for the manufacturers that have brought operations back home.
“65% of OEMs that have reshored or are reshoring are satisfied with the results,” the report said. That’s still a majority, but it’s a far cry from the 96% satisfaction rate OEMs reported in 2025.
Companies that have reshored have reported a number of positive outcomes including improved time to market, better on-time delivery performance and savings in freight costs.
At the same time, reshoring has also created new challenges. OEMs faced rising labor and overhead costs, gaps in domestic component availability and workforce availability issues.
One OEM in the cold storage sector said it moved glass door sourcing from Taiwan to Kentucky or Texas. But the company said its biggest challenge was a shortage of workers.
“The biggest impact we’ve had is labor shortages,” the OEM said.
The availability of domestic components is in line with a recent McKinsey Global Institute report that found, on average, domestic manufacturing capacity would need to double to meet demand.
While there has been a recent uptick in reshoring activity, uncertainty over tariffs remains a major concern for manufacturers, especially as trade policies can change suddenly with little or no warning.
Tensions over trade have grown in recent weeks between the U.S. and Canada. The U.S. has slapped tariffs on steel and aluminum and Canada has said it will take retaliatory measures starting Tuesday.
The report adds: “It is not that manufacturers are asking for a specific tariff level. What they want most of all is more stability and predictability so that companies can have more confidence in making investment and operational decisions.
“Manufacturers can plan around a known cost, they cannot plan around a moving target,” the report stated.
