The Reshoring Reality: Supply Chain Resilience in U.S. Manufacturing

Written by Aryahi (Research Lead), Arsh Singh, Jack Kargel, Aji Venkatesh

EXECUTIVE SUMMARY:

• The COVID‑19 pandemic exposed the United States’ heavy dependence on foreign manufacturing, prompting renewed interest in reshoring and domestic supply chain resilience

• Government policy has played a central role in reshoring, with the Biden administration emphasizing subsidies and incentives such as the CHIPS and Science Act, while the Trump administration relied more heavily on tariffs to influence corporate behavior

• Despite large increases in private investment and job announcements, manufacturing employment has not returned to historical levels due to automation, productivity gains, and a shrinking skilled labor force

• Severe shortages of trained workers, particularly in high‑tech and semiconductor manufacturing, threaten the long‑term effectiveness of reshoring efforts even as new facilities are built

• Reshoring in the United States is increasingly concentrated in capital‑intensive, technology‑driven industries led by firms such as Apple and NVIDIA, signaling a structural shift toward advanced manufacturing rather than a return to labor‑intensive production

Introduction 

When the COVID-19 pandemic hit, it did not take long for the cracks in the global supply chain to show. The United States found itself severely dependent on foreign production for everything from semiconductors to household goods. Through this it became clear that the U.S. needed to think about its reliance on foreign production, and bringing production back home became a priority. What followed was a period of significant investment, political debate, and industrial change that continues today. The federal government stepped in with major legislation, large tech companies began establishing roots in the U.S., and reshoring became a central topic across both political parties. But behind the headlines and job announcements, reality is more complicated. Labor shortages, automation, and shifting government strategies have all shaped what reshoring actually looks like in practice. 

Changes in Administration & Government Policies 

The distinct differences between the Biden and Trump administrations reflect the approaches taken to strengthen domestic manufacturing and emphasize reshoring. With the Biden administration’s efforts being supported by government incentives, polices, and subsidies, all following major supply chain disruptions from the COVID-19 pandemic. Revitalizing domestic manufacturing and reducing reliance on foreign production became a major goal. Reshoring was observed in many developing technological sectors including both electronics and electric vehicles, with over 224,000 new reshoring and foreign direct investment jobs in 2024 (FCNews, 2025). This effort was supported by the CHIPS and Science Act, which provided subsidies to support the production of semiconductors domestically. This act generated 6,000 jobs in direct manufacturing and an additional 20,000 in construction. With reshoring efforts during the Biden administration amounting to over 700,000 new jobs in the manufacturing industry, along with over $910 billion in private manufacturing investments (U.S. Department of Commerce, 2024), promoting both domestic production, reshoring, and reinforced supply chains following the pandemic. 

Figure 1: Manufacturing construction spending remained relatively stable until early 2021. With a huge surge aligning with the passage of the CHIPS and Science Act, emphasizing the significant impact of these policies on incentivizing domestic semiconductor manufacturing and reshoring (FRED, 2026)

In contrast, reshoring efforts under the Trump administration carried a greater emphasis on tariffs and trade protection to encourage and boost domestic production. Carrying the hope that tariffs would discourage imports and push companies to reshore their manufacturing to the United States. However, under this current administration, domestic employment has declined by 108,000 jobs in 2025, along with a slowdown in hiring, amounting to 330,000 fewer manufacturing hires in 2025 (PPI, 2026). This approach has introduced further volatility and uncertainty within global supply chains, with trends suggesting that tariffs have not translated into an increase in job growth.  

Despite the differences between these two approaches, the shift from subsidy and government-incentive-driven reshoring to tariff-driven reshoring. The broader effort toward reshoring has remained persistent. With the Biden administration's incentives boosting job creation across developing, technological sectors, whereas the Trump administration's push for tariffs placed pressure on firms' decision to reshape supply chain strategies. Although the evolving space of tariffs and investments has not translated directly into increases in employment, the impact on reshoring is clear and ongoing. With over 244,000 reshoring and foreign direct investment jobs announced in 2024 (Reshoring Initiative, 2025), emphasizing the continued recent growth in domestic production, regardless of declining manufacturing employment. Representing key trade-offs, the Biden administration's incentives were supported by large amounts of government spending, which raised concerns for the sustainability of potential long-term investments and growth opportunities. Whereas the Trump administration's tariffs emphasized company decisions by increasing production costs, leading to fewer jobs. Through this evolving period, reshoring and investment into domestic production continue to remain supported despite limited growth in employment. 

Labor Markets 

Reshoring is often promoted to boost American manufacturing and generate jobs, but its impact on the labor market is more complex than the promise suggests. The Reshoring Initiative reports that 244,000 U.S. manufacturing jobs were announced just in 2024 through reshoring and foreign direct investment. This represents a larger trend of increased investment in U.S. based manufacturing due to a combination of supply chain risk, geopolitical pressures and industrial policies (Reshoring Initiative).  

However, just because job announcements have been made does not mean that this translates directly into a resurgence of the labor market. One major concern is that the size of the manufacturing workforce in the U.S. has decreased significantly since its peak. The number of people employed in the U.S. fell from 17.2 million in 2000 to 12.7 million in 2025, a decline of about 26.2% (Barua and Agarwal). In other words, even as reshoring gains attention, manufacturing employment remains structurally below past levels. This matters because reshoring is often framed politically as a return to earlier industrial strength, yet the labor base needed to support that vision has eroded over time. 

Figure 2: Semiconductor and electronic component manufacturing employment has peaked nearly 700,000 in the early 2000s before heading to a dramatic collapse following the Dom-com bust and losing nearly half of the industries workforce. By 2010 employment has since been stabilized to around 350,00-380,000 suggesting that automation gains and overall productivity rather than headcount of workers have leveraged industry expansion overall.

Another reason why reshoring cannot achieve its full potential is because of the significant shortage of skilled workers. It is estimated that 2.1 million manufacturing jobs could go unfilled by 2030, with an estimated loss of $1 trillion to the economy in 2030 (NAM News Room). While companies will continue to invest in new facilities and equipment, they also require technicians, engineers, machine operators and maintenance personnel to run their operations. Without those specialized workers, reshoring can produce investment without producing the expected employment gains. 

General Motors has announced changes to reshape its Buick operations in response to increased tariffs on products it manufactures in China. Instead of China, the next generation of Buick Envision models will be manufactured at its Fairfax Assembly Plant in Kansas City, KS, starting in 2028. The company has sourced these models from China since 2017. The Fairfax Assembly Plant has struggled in recent years to produce as many models as it used to. However, integrating Buick Envision models into the Fairfax Assembly Plant will bring hundreds of new jobs to the area. 

The skill shortages are particularly sharper in the high-tech sector. Many of the jobs being brought back via reshoring are concentrated in the semiconductor industry. This industry is projected to create approximately 115,000 jobs between now and 2030 which would result in an increase of about 33% overall. However, according to projections, up to 67,000 of those new positions will remain unfilled because of insufficient degrees being awarded (SIA). This is important because it shows that reshoring today is not mainly about bringing back large numbers of low-skill assembly jobs. Instead, it is tied to sectors that demand specialized training, which makes workforce development a central part of industrial competitiveness. 

Manufacturing & Technology 

Apple has just announced one of the largest commitments to its reshoring efforts. They have noted that they have expected over 500 billion in revenue in the United States in over four years. Furthermore, the main push into reshoring indicates their focus on skills and artificial intelligence. Additionally, they have announced the construction of a new server facility in Houston. The 250,000 square foot facility will produce the servers that will power Apple's products that were previously made outside of the U.S. Furthermore, they will create thousands of jobs as a result. 

Along with Apple, NVIDIA is another great example of tech giants' recent reshoring efforts. In April of 2025, NVIDIA announced a $500 billion commitment to AI manufacturing in the United States. Coming as a shock to most, this signals the first time that AI chips and supercomputers are made completely on American Soil. This, followed by the recent international tariff environment; 32% on Taiwan and 145% on China, has led to a surge in NVIDIA supply chain reshoring. Not only that, but the CHIPS and Science Act, supporting semiconductor research in the US, also pairs well with this newfound reshoring. 

Now, Blackwell Chips are in production in Phoenix, Arizona, and these “Super Computer” assembly facilities are currently being built in Houston with Foxconn and in Dallas with Wistron. In the next 12-15 months, NVIDIA expects to start and carry out mass production of these chips and computers. As a result of this reshoring, NVIDIA has acquired over 1 million square feet dedicated to manufacturing alone.  

While this investment is initially costly for the company, the change in infrastructure is expected to create jobs, boost economic activity, uphold and strengthen the US domestic supply chains, and push America's technological leadership forward. The system that NVIDIA is building within the US is a vertically integrated “ecosystem” where chips, packaging, testing, and assembly are all part of their operating model. This setup reduces the geopolitical risk involved, while also increasing employment opportunities with the US. Looking at the United States Federal Reserve, this heavy investment within the US could lead to a ripple effect down the line in the wage trajectories of tech manufacturing and even the displacement of imported goods. 

Simultaneously, new data support the view that reshoring momentum is real, but it is targeted toward certain industries and areas. After the disruptions during COVID-19, firms have increasingly prioritized supply chain resilience over purely optimizing the cost of their own systems. Overall, US employment has been in a large decline over the past four decades, going from about 17 million workers in the labor force in the late 1970s to a much smaller number of 12 million now. The Federal Reserve states that semiconductor and electronic components manufacturing has declined from 2000 to 2026, and the number of employees in this manufacturing industry has shifted from around 710,000 to 368,400. The electronic production index has increased from 8.28 in 2000 to 176.1 in 2026, and according to the Federal Reserve, this shows an overall shift toward more capital-oriented production. The overall analysis of the data shows that restoring efforts do not imply a return to heavy labor manufacturing in every situation, with machine-run production lines having really taken over the blue-collar labor force as well. This affects the economy of the reshoring industry. These lines can produce more with fewer workers, giving AI an advantage over human labor. 

Figure 3: industrial production of semiconductor electronic components has risen dramatically since 1990s sharply after 2019. This has been at an all-time high by 2025. This surge reflects the AI driven demand boom push for the chips and science act with input now more than 60% above its 2017 baseline.

Industries have also made several decisions toward artificial manufacturing in the reshoring sector. They have doubled their investment in the Advanced Manufacturing Fund, increasing it from $5 billion to $10 billion. Furthermore, they are developing a plan to produce the chips at TSMC’s Arizona facility, which currently employs over 2,000 workers. Around 20,000 new positions at their company will be created because of this decision. Finally, companies are establishing a Manufacturing Academy in Detroit to teach next-generation workers the skills required for these new industries. 

Conclusion 

The reshoring movement in the United States represents a meaningful and ongoing transformation of the country's industrial and economic landscape, though it is one filled with both promise and complexity. Government policy has played a defining role, with the Biden administration's subsidy driven approach generating hundreds of thousands of jobs and billions in private investment, while the Trump administration's reliance on tariffs has introduced uncertainty and slowed employment growth. At the same time, the labor market presents a persistent challenge, as widespread skill shortages threaten to limit the full potential of reshoring even as job announcements continue to rise. The technology sector, led by corporations like Apple and NVIDIA, signals that the future of American manufacturing is increasingly tied to high value, capital intensive production rather than a return to traditional mass labor. Together, these trends suggest that reshoring is not a simple reversal of decades of offshoring, but instead a structural evolution of how and what the United States produces. Reshoring has shown it can create real change, but closing the gaps in skilled labor, long term investments, and consistent policy will be what determines how far that change actually goes.