Peter Klausz

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Trade & Manufacturing

Restoring U.S. Manufacturing

A sourced, dated guide to reshoring, onshoring and nearshoring: what is driving it, which policies matter, what constrains it, and what it means for small manufacturers.

I’m Peter Klausz, a supply chain professional who works with small and mid-size U.S. manufacturers through Statadventure, LLC. This page separates what is documented from what is still announced, and it shows evidence on both sides.

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Last updated 2026-10-11. Facts on this page are sourced and dated; analysis is labeled as analysis. Announced investment is not the same as completed investment. General information only, not legal, customs, tax, investment or financial advice. Companion pages: Trade Wars and Tariffs: Current State and Companies Investing in or Moving to the USA.

Where things stand

Reshoring is one of the most discussed ideas in U.S. industrial policy, and one of the easiest to overstate. The data below come from government statistics and named research groups. Read them together: jobs and construction are real, but the import data show the country is still heavily reliant on foreign supply.

IndicatorLatest figure and as-of dateSource
Manufacturing jobs+9,000 in September 2026; up 72,000 since a recent low in December 2025 (BLS, released 2026-10-02)BLS
Manufacturing job openings522,000 in August 2026, up about 26% from a year earlier (BLS JOLTS, reported 2026-10-02)Manufacturing Dive
Manufacturing construction spending$170.7 billion at a seasonally adjusted annual rate in August 2026 (Census, updated 2026-10-01)Census via FRED
Net reshoring (Kearney index)-91 basis points for 2025, improved from -115 but still net offshoring (Kearney, 2026-04-29)Kearney
Reshoring and FDI job announcementsAbout 240,000 projected for 2025, about 7% below 2024 (Reshoring Initiative, December 2025 projection)Reshoring Initiative
Average U.S. tariff rate (statutory)11.0% as of 2026-08-24; 11.8% projected by year-end under current law (Yale Budget Lab)Yale Budget Lab

Analysis: these indicators point in different directions. Employment has recovered from a late-2025 low, yet factory construction spending has cooled and net reshoring remained negative in Kearney’s 2025 data. Alliance for American Manufacturing president Scott Paul, quoted by Manufacturing Dive on 2026-10-02, said factory construction “has cooled a bit since its peak” but that the investment is converting into job opportunities.

Terms: reshoring, onshoring, nearshoring, friendshoring

These words are used loosely, so it helps to pin them down. Definitions below are general usage, not a legal standard.

  • **Reshoring:** bringing production back to the country where a company is headquartered or sells, after it was moved abroad.
  • **Onshoring:** producing within the home country, including when a foreign company builds a U.S. plant. Foreign direct investment (FDI) projects, such as Hyundai’s steel mill in Louisiana or SK hynix’s packaging plant in Indiana, are onshoring but not reshoring in the strict sense.
  • **Nearshoring:** moving production to a nearby country. For U.S. buyers that usually means Mexico or Canada, and it depends on trade rules such as the USMCA.
  • **Friendshoring:** moving sourcing to allied or politically aligned countries to reduce geopolitical risk.

Kearney’s annual index, for example, measures only imports from 14 Asian low-cost countries and regions relative to U.S. manufacturing output, so it captures offshoring to those places, not every kind of sourcing shift (Kearney, 2026-04-29).

What is driving companies to build or buy in the U.S.

Company statements point to several different drivers. They are listed here with examples from each company’s own words, which are also quoted in the company tracker.

Tariffs and trade policy

Some firms cite tariffs directly. MotorTrend reported that Mercedes-Benz’s decision to build the next GLC in Alabama was partly, but not entirely, due to the 15% U.S. tariff on imported vehicles, and board member Michael Schiebe said the U.S. is such an important market that “it only makes sense to produce the car here in the U.S.” (MotorTrend, 2026-04-03). Volkswagen’s CEO Oliver Blume went the other way in January 2026, saying that “given an unchanged tariff burden, large additional investment cannot be funded,” in explaining why a planned Audi U.S. plant was at risk (Reuters via Yahoo Finance, 2026-01-25). Tariffs can push investment either direction depending on a company’s margins and its alternatives.

Customer proximity and demand

Toyota’s chief operating officer Mark Templin described its U.S. investment as tied to a philosophy of “building where we sell and buying where we build.” Micron said its raised U.S. plan was “driven by surging demand for memory in the AI era” (Micron, 2026-07-09). Electrical-equipment makers such as Siemens and Hitachi Energy point to demand for grid and data-center infrastructure.

National security and supply-chain resilience

SK hynix said its Indiana packaging plant would help “stabilize the U.S. semiconductor supply chain and contribute to strengthening U.S. national security and economy.” In steel, the Nippon Steel and U.S. Steel deal came with a National Security Agreement and an investment commitment of about $11 billion by 2028 (U.S. Steel, 2025-06-18).

Government relationships and incentives

Several pharmaceutical releases are tied to government engagement. Johnson & Johnson announced its manufacturing update alongside a voluntary agreement with the U.S. government on medicine access and costs, and Genentech said it was “supportive of President Trump’s goal to bring more pharmaceutical manufacturing to the United States.” Commerce Secretary Howard Lutnick said, in Micron’s release, that “there has never been a better time to invest in the United States.” Analysis: announcements often reflect a mix of commercial logic and relationships with policymakers, and the two are hard to separate from outside.

Policy tools: what is actually in place

Tariffs and trade measures

The legal basis for U.S. tariffs changed in 2026. On 2026-02-20 the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize tariffs (Learning Resources v. Trump). Duties under Section 232 (national security) and Section 301 (unfair practices) remain, and a new Section 301 forced-labor action of 10% or 12.5% on 60 economies was imposed on 2026-07-23 and took effect on 2026-07-24 (CRS, data as of 2026-09-30; Honigman). The details, with a timeline and legal status, are on the Trade Wars and Tariffs page.

CHIPS Act and equity stakes

The Advanced Manufacturing Investment Credit is 35% of qualified investment for semiconductor-manufacturing property placed in service after December 31, 2025, up from 25% for property placed in service from the end of 2022 through 2025 (IRS). The credit is time-limited, so confirm current deadlines with a tax advisor. In August 2025 Intel agreed to issue up to 433,323,000 shares and warrants to the Commerce Department in exchange for accelerated and other CHIPS-related disbursements totaling about $8.87 billion (Intel Form 8-K, 2025-08-25). The U.S. Steel deal also included a government “golden share” under its National Security Agreement.

Tax incentives

The 2025 tax law (Public Law 119-21) made 100% bonus depreciation permanent for most qualifying property acquired after 2025-01-19 (RSM, 2025-07-14) and created temporary 100% first-year expensing for qualified production property. That property must begin construction after 2025-01-19 and before 2029-01-01, and be placed in service after 2025-07-04 and before 2031-01-01 (Forvis Mazars, 2026-03). Eligibility rules are detailed, so a tax professional should review any project.

Clean-energy manufacturing credits were curtailed

The same law ended the new clean vehicle credit (Section 30D) for vehicles acquired after 2025-09-30 (IRS FAQ) and accelerated phase-out timelines for the Section 45X advanced manufacturing production credit, especially for wind and critical-minerals components (Eide Bailly, 2025-09-03). Analysis: the battery and EV cluster shows the cost of that policy shift. GM and Samsung SDI’s $3.5 billion Indiana battery project was reported paused, and the Ford and SK On joint venture BlueOval SK was dissolved in May 2026. See the tracker for sources.

Federal procurement and grants

Government demand is a direct reshoring tool in defense. Lockheed Martin said a July 2026 contract award of up to $53.86 billion for PAC-3 MSE interceptors would let it triple capacity by the end of 2030 (Lockheed Martin, 2026). The Department of Energy is supporting Cleveland-Cliffs’ $1 billion Middletown Works project with a $500 million award (Cleveland-Cliffs, 2026-08-21).

What is holding reshoring back

Workforce

The Manufacturing Institute and Deloitte projected in 2024 that U.S. manufacturing could need as many as 3.8 million new employees by 2033, with about half of those roles at risk of going unfilled (Manufacturing Institute and Deloitte, 2024-04-03). As of August 2026, manufacturing job openings were 522,000 (BLS JOLTS via Manufacturing Dive). That is an estimate and a recent data point, not a forecast that shortages will persist.

Costs and the import ecosystem

Kearney’s 2026 report found that even after tariffs, the typical source-country cost of laptops and smartphones stayed below what it could cost to make them in the U.S. It also found that U.S. manufacturing investment has tripled over four years while capacity grew only 1.5%, and that executives’ investment-return expectations were being reduced by labor, supply-ecosystem and policy concerns (Kearney, 2026-04-29). Kearney’s Mexico lead said nearshoring growth is likely to be uneven because of USMCA uncertainty and tariffs.

Policy uncertainty and timing

Intel moved its Ohio fab timeline in February 2025 to align production with “the needs of our business and broader market demand.” Stellantis’ Belvidere, Illinois plant restart slipped from 2027 to a pilot in the first half of 2028 and retail production in the second half of 2029. Panasonic’s Kansas battery plant opened but its ramp was delayed. These are examples from the tracker, and they illustrate why announced dates are not delivery dates.

Input costs

Tariffs raise costs for importers, and some of that cost passes to buyers. Federal Reserve staff estimated in April 2026 that tariffs in place through November 2025 raised core goods PCE prices by 3.1% through February 2026 (Federal Reserve FEDS Note, 2026-04-08). Yale’s Budget Lab estimated in August 2026 that current-law tariffs would raise the price level about 0.7%, or roughly $1,100 per household per year (Yale Budget Lab, 2026-08-24). Manufacturers that import components or steel face the same price effects as an input cost.

The defense industrial base angle

Defense is where reshoring has the most direct government demand signal. Lockheed Martin says it is investing $8 to $9 billion through 2030 to modernize more than 20 U.S. facilities and scale munitions output, and it described multiyear awards of up to $35 billion for THAAD and up to $53.86 billion for PAC-3 MSE (Lockheed Martin, 2026). Anduril began Fury production at its Arsenal-1 campus in Ohio in March 2026, and the first Ohio-built aircraft rolled out on 2026-07-27 (JobsOhio, 2026-07-27). Micron said its Virginia site started initial production of DDR4 memory aimed in part at aerospace and defense customers (Micron, 2026-07-09).

For suppliers, the practical consequences are documentation and qualification more than price. Quality systems, traceability, domestic-content and cybersecurity flow-down clauses (for example, DFARS clauses in your contract) apply regardless of where demand comes from. I don’t claim security clearances or government contracts, and nothing here is legal advice. For help organizing supplier quality records and sourcing data, see Manufacturing Procurement & Supply Chain Services.

What it means for small manufacturers

Large announcements matter to small shops mainly through their supply chains. Apple opened an Advanced Manufacturing Center in Houston on 2026-08-13 to give small and mid-size businesses hands-on access to equipment and training (Apple, 2026-08-13), and Micron said it plans to invest up to $3 billion to develop the domestic semiconductor supply chain ecosystem (Micron, 2026-07-09). Whether those programs reach a given small supplier is uncertain.

**Possible opportunities**

  • New OEM and Tier-1 demand as large customers localize production, if you can meet their quality and delivery requirements.
  • Tax treatment for plant and equipment investment, which should be reviewed with a tax advisor.
  • Customers who want domestic or allied sources for risk reasons.

**Risks to plan for**

  • Customer timelines that slip, as with Intel Ohio and Stellantis Belvidere.
  • Higher input costs from tariffs on imported parts and metals.
  • Hiring and retention, especially for skilled trades.
  • Contract terms: who bears tariff changes, and who is the importer of record.

**A practical first-step checklist**

  1. List your top 50 purchased parts by annual spend, with supplier, country of origin and HTS code.
  2. Mark which parts face Section 232, Section 301 or antidumping duties today.
  3. Compute landed cost, not just unit price (see the sourcing playbook).
  4. Identify single-source parts and a candidate second source for each.
  5. Ask your top five customers what their forecast and localization plans are, and how firm they are.
  6. Review contracts for price-adjustment and tariff pass-through clauses.
  7. Track the monthly indicators below so you decide on evidence, not headlines.

For analysis help, Statadventure builds Python and SQL tools such as supplier scorecards and landed-cost calculators, and the Knowledge Base explains the formulas.

Indicators to watch

  • **Monthly:** BLS employment (next release 2026-11-06), JOLTS openings, Census construction spending and ISM manufacturing surveys.
  • **Annually:** Kearney Reshoring Index and Reshoring Initiative job data.
  • **Policy and legal:** the Court of International Trade’s pending ruling on the Section 301 forced-labor tariffs (argued 2026-09-30), the Federal Circuit appeal on Section 122, Section 232 outcomes for robotics and industrial machinery, and the statutory USMCA joint review.
  • **Company follow-through:** whether announced projects reach construction milestones, as shown in the tracker.

Method and limitations

I used primary sources where possible: government releases and statistics, SEC filings, company press releases and court opinions, supplemented by named research groups and trade press. Quotes are verbatim and attributed. Figures are shown with the date they were published. Where I could not verify a claim, I left it out. Analysis is marked as analysis, and it reflects my interpretation as a supply chain practitioner, not a forecast.

This page is not a complete account of manufacturing policy. It does not cover state incentives in detail, and it does not assess whether any policy is wise, only what is documented and what the evidence shows.

Frequently asked questions

What is the difference between reshoring, onshoring, nearshoring and friendshoring?

Reshoring generally means returning production a company previously moved abroad. Onshoring is the broader term for producing in the home country, including by foreign firms building U.S. plants. Nearshoring moves production to a nearby country, such as Mexico or Canada for U.S. buyers. Friendshoring shifts sourcing to allied or politically aligned countries. The terms overlap, and data sources count them differently.

Is U.S. manufacturing actually being restored?

The evidence is mixed. As of 2026-10-02, BLS reported manufacturing employment up 72,000 since a December 2025 low, and the sector added 9,000 jobs in September. As of April 2026, Kearney’s index still showed net offshoring, and imports of manufactured goods rose in 2025. Announced investment is large, but announcements are not completed plants.

Do tariffs bring factories back?

Tariffs change relative costs, and some companies cite them. Kearney’s 2026 analysis found tariffs shifted where imports came from more than they reduced import dependence. Other firms say demand, customer proximity or national security matter as much. Both views are supported by company statements and research, so treat any single-cause claim with caution.

Which policy tools matter most to manufacturers?

Tariffs and trade measures, the CHIPS Act’s investment credit, 2025 tax-law changes such as permanent 100% bonus depreciation and temporary 100% expensing for qualified production property, federal procurement (especially defense munitions contracts), and state incentives. Some earlier clean-energy manufacturing credits were curtailed in 2025.

What does this mean for a small manufacturer?

Possible upside: new OEM and supplier demand, tax treatment for plant investment, and customers seeking domestic or allied sources. Risks: slipping customer timelines, higher input costs, tariff exposure on imported parts and a tight labor market. A practical first step is a part-by-part tariff and supplier-risk map.

How is defense manufacturing different?

Defense demand is driven by government contracts and security rules, not only by cost. Large multiyear procurement contracts, such as Lockheed Martin’s PAC-3 award of up to $53.86 billion, give suppliers visibility, but small suppliers still face qualification, quality and traceability requirements.

Can you guarantee savings or growth from reshoring?

No. Results depend on your parts, volumes, suppliers and market. I agree what will be measured up front and report honestly, including when current suppliers are already competitive.

Trade Wars and Tariffs: Current State

Timeline, legal status and a practical sourcing playbook.

Read the page

Companies Investing in or Moving to the USA

44 companies with sourced status, including delays and cancellations.

Read the page

Working through these issues in your own supply chain? See Manufacturing Procurement & Supply Chain Services, Statadventure (supply chain software in Python and SQL), the Supply Chain Knowledge Base, all services, or get in touch.

Sources

Every figure above comes from one of these sources, with the as-of date shown in the text. Links were checked on 2026-10-11.

Want help applying this to your supply chain?

I help small and mid-size manufacturers map tariff exposure, compare landed cost and qualify second sources. I don’t guarantee savings, and I’ll tell you when you need a customs broker or trade attorney.

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