Many US manufacturers are asking whether they should move some of their supply closer to home. The question usually comes up after a disruption, a tariff change or a long wait for a container. The answer is rarely “move everything” or “move nothing.” This checklist helps you compare the options for specific parts, using facts rather than headlines.
What the terms mean
- Offshoring: sourcing from a distant country, often in Asia, usually for cost reasons.
- Nearshoring: moving supply to a nearby country, such as Mexico or Canada for US buyers.
- Reshoring: bringing supply or production back to the United States.
- Friend-shoring: sourcing from countries with close trade and political ties. This term is used less often but appears in policy discussions.
In practice, many businesses use a mix, choosing the best location for each part or family.
Pick the right parts to study
Do not start with the whole bill of materials. Start with parts that combine several of these traits:
- High total spend
- Heavy or uncertain tariff exposure
- Long or unreliable lead times
- A single supplier
- Quality problems or high freight costs
Our guide to single-source supplier risk shows how to build that list.
The seven-part checklist
1. Total landed cost
Compare the full cost of each option, not the unit price: freight, duty, brokerage, insurance, handling and the cost of holding inventory in transit. Read how to calculate landed cost and use the landed cost calculator.
2. Duty and trade rules
Duty depends on classification and origin. Nearshore sources may qualify for reduced duty under a trade agreement such as USMCA, but only if the origin rules are met. CBP explains the agreements on its free trade agreements page. Confirm details with your customs broker.
3. Lead time and inventory
Shorter transit times can mean less inventory in the pipeline and smaller safety stock. Use the safety stock calculator to test how a shorter, steadier lead time would change your buffer.
4. Flexibility
A closer supplier may be able to respond faster to changes in demand. Consider how often your forecast changes and how costly it is to be wrong.
5. Quality and qualification
Any new supplier needs approval. Estimate the time and cost of samples, testing, first-article inspection and any customer approvals. Our supplier diversification plan covers this in more detail.
6. Capacity and skills
Check whether the new region has suppliers with the right processes, capacity and skilled workers for your volumes. A promising quote means little if the supplier cannot scale.
7. Risk spread
Moving everything from one country to another can simply move the risk. Consider whether a mix of locations gives better protection.
Build a simple comparison
For each part you study, create a table with your current source and one or two alternatives. Fill in the seven areas with numbers where you have them and notes where you do not. Be honest about uncertainty; an estimate labeled as an estimate is more useful than a precise-looking guess.
Common mistakes
- Comparing unit price only
- Ignoring the time and cost of qualification
- Assuming tariffs will stay the same, or assuming they will disappear
- Making a single big move instead of testing with a few parts first
How we help
We build the landed cost and lead time comparison from your data, model tariff scenarios and help you choose which parts to test first. We work alongside your customs broker or trade attorney for legal questions. Free call first, scope agreed before we start.
Read more in our procurement and tariff guide, or follow trade news in Supply Chain Watch.
Frequently asked questions
Is reshoring always more expensive?
Not always. A domestic part may have a higher unit price but lower freight, duty, inventory and risk costs. Only a full landed cost comparison for each part will tell you.
Should we move whole product lines at once?
It is usually safer to test with a few parts first. That lets you learn about qualification, quality and lead times before making larger commitments.
Are there government programs that support reshoring?
There are federal, state and local programs that may apply in some cases. Eligibility depends on your situation, so check with your state economic development agency and your advisors.
How long should a comparison take?
For a handful of parts with good data, a comparison can often be built in a few weeks.