Reshoring: Despite Investments, Tariffs Imports Still Rise

Why It Matters

The lagging capacity growth and rising import share signal that reshoring incentives remain insufficient, threatening U.S. supply‑chain resilience and domestic job creation.

Key Takeaways

• China’s share of manufacturing imports fell below 10%, half four years prior
• Other Asian low‑cost regions gained $193 billion in imports last year
• U.S. manufacturing capacity grew only 1.5% despite tripled investment
• Computer & Electronics imports rose 29% while domestic output grew 2.8%
• Mexico’s C&E imports increased $47 billion, up 8% year‑over‑year

Pulse Analysis

The Kearney 2026 Reshoring Index underscores a paradox in U.S. industrial policy: record‑high capital spending has not translated into proportional domestic output. While federal and state incentives aim to bring production home, the data reveal a mere 1.5% rise in manufacturing capacity over the past four years. This disconnect reflects deeper structural challenges—tight labor markets, fragmented supply‑chain ecosystems, and policy uncertainty—that erode the return on investment for reshoring projects. Companies are therefore cautious, scaling back or postponing plant expansions despite the allure of tariff‑driven cost advantages.

A closer look at product categories shows that the hardest‑to‑reshore segments—Computer & Electronics and Apparel & Accessories—continue to dominate import volumes. Imports of C&E surged 29%, far outpacing the 2.8% growth in U.S. domestic output, because the cost of producing laptops and smartphones abroad remains below U.S. manufacturing costs even after tariffs. Meanwhile, China’s share of total imports halved to under 10%, yet the vacuum was quickly filled by other Asian low‑cost regions, which together added $193 billion in value. This shift highlights that tariff pressure alone cannot reconfigure global sourcing patterns without competitive cost structures and reliable talent pipelines.

Mexico’s emerging role adds another layer to the reshoring narrative. An $47 billion, 8% rise in Mexican C&E imports signals that nearshoring is gaining traction, especially for products where logistics and trade‑agreement stability matter. However, lingering doubts about the future of USMCA and tariff volatility could dampen this momentum. For policymakers, the takeaway is clear: incentives must be paired with long‑term certainty on labor, regulatory frameworks, and trade rules to make reshoring a viable, scalable strategy for revitalizing American manufacturing.