Operating in a cost-effective manner remains a top priority for manufacturers. Cost savings can be achieved through various aspects of production, from material selection to energy-efficient equipment usage. For years, Just-in-Time (JIT) manufacturing, which minimizes inventory and optimizes shipments, was the go-to strategy for manufacturers. Offshoring production, particularly to Asia, was a common way to reduce costs while maintaining JIT efficiency.
However, in the wake of supply chain disruptions, increased tariffs, and economic uncertainty, manufacturers are re-evaluating their strategies. The shift from JIT to Just-in-Case (JIC) manufacturing—which prioritizes inventory security and risk reduction—has led many companies to bring operations closer to home through onshoring.
The Latest Tariffs & Their Impact on Manufacturing
Recent geopolitical shifts have further accelerated the push for onshoring. In early 2025, the U.S. imposed new tariffs:
- 25% on imports from Canada and Mexico
- An additional 10% tariff on Chinese goods, bringing the total to 20%
In response, China imposed retaliatory tariffs of 10-15% on U.S. agricultural products, escalating trade tensions. These rising costs and uncertainties have prompted U.S. manufacturers to rethink offshore dependencies and explore domestic production alternatives.
Why Onshoring is Gaining Momentum
According to industry reports, nearly two-thirds of U.S. and European manufacturers plan to shift some Asian production back home by 2025. The shift is fueled by multiple factors:
- Escalating tariffs that increase production costs overseas
- Supply chain risks from geopolitical instability and trade disputes
- Ongoing labor shortages and regulatory uncertainties abroad
- Sustainability initiatives encouraging localized production
With transportation costs rising and ocean freight rates surpassing the value of the goods they carry, onshoring has become an increasingly viable option.
The Benefits of Onshoring with Sussex IM
For manufacturers looking to mitigate risks and improve efficiency, onshoring offers significant advantages:
✅ Risk Aversion – Onshoring minimizes exposure to supply chain disruptions, quality inconsistencies, and fluctuating costs associated with offshore production.
✅ Reduced Travel & Logistics Costs – International travel for on-site inspections is costly and time-consuming, especially as border restrictions remain unpredictable. Onshoring eliminates these barriers, making operations more agile and cost-effective.
✅ Faster Lead Times – Domestic manufacturing ensures quicker turnaround times, reducing supply chain delays and keeping production schedules on track.
✅ Lower Shipping & Tariff Expenses – With tariffs and shipping costs on the rise, onshoring eliminates international freight costs and protects manufacturers from fluctuating import duties.
✅ ‘Made in the USA’ Advantage – Many consumers and businesses prefer domestically made products for their quality and reliability, giving onshored manufacturers a marketing advantage.
What About Nearshoring?
Some manufacturers consider nearshoring—moving production to Mexico or Canada—as a middle ground. While nearshoring can offer cost savings, it still carries risks compared to onshoring, such as:
- Unpredictable government policies and labor regulations
- Potential supply chain disruptions due to border/customs delays
- Trade tensions that may lead to additional tariffs
Given the new U.S. tariffs on Canada and Mexico, nearshoring no longer provides the same financial advantages it once did. As a result, many companies are opting for domestic production to maximize stability.
Your Trusted Wisconsin-Based Manufacturer
At Sussex IM, we recognize the challenges manufacturers face in today’s evolving market. With over four decades of experience in plastic injection molding, we provide reliable, cost-effective, and scalable onshoring solutions.
We proactively manage supply chain risks by:
✔ Holding safety stock of resin materials to prevent shortages
✔ Investing in automation and lean manufacturing to optimize efficiency
✔ Helping customers with seamless tooling transfers to transition production domestically
As onshoring becomes the new standard, Sussex IM is here to help businesses adapt, compete, and thrive in an ever-changing global economy.
Contact us today to learn how Sussex IM can support your onshoring efforts and safeguard your supply chain.