With Chinese imports carrying 145% tariffs, reshoring has become urgent for U.S. industries, according to manufacturing consultant Kip Hanson.

For small and medium-sized manufacturers, the playing field is beginning to tilt in their favor.

After companies survived daily supply disruptions during the pandemic, shorter transit times and fewer variables make localized supply chains appealing.

But risks remain. Reshoring is “an arduous calculation that pits long-term control and tariff avoidance against the brutal math of higher input costs.”

Most manufacturers are embracing hybrid models of supply chains, a trend that Hanson calls “strategic reshoring.”

“That means keeping critical production in-house while sourcing commodity components from friendlier markets, offsetting higher costs or unavailable labor with automation, and shortening some supply chains while diversifying others.”

Reshoring Initiative founder Harry Moser recalls how reshoring announcements surged in 2017, only to fizzle out the next year amid business whiplash from shifting tariff policies.

“We all remember when Trump put tariffs on steel imports,” Moser says. “Now, steel in the U.S. costs roughly one-third more than it does in Mexico or China. Steel producers celebrated, while the downstream manufacturers who employ far more workers watched as their margins evaporated.”

For small and medium-sized shops, sustained success will require rethinking process efficiency, moving to digital workflows and embracing advanced technology, Hanson concludes.

“Long-term reshoring needs long-term investment: in skilled trades and infrastructure, and in tax and permitting reform,” Hanson writes. “Without it, even the most patriotic company may think twice before bringing production home.”

Kip Hanson is the proprietor of KAHMCO LLC in Tucson.