Reshoring Is Happening, Just Not Where You Expect

The political rhetoric around reshoring has outpaced the economic reality. Manufacturing investment in the United States has grown, but the majority of new capacity serving North American demand is being built in Mexico.

Mexican industrial real estate absorption has tripled since 2022. Vacancy rates in Monterrey, Tijuana, and Ciudad Juárez are below 2%. Chinese manufacturers, in particular, have invested heavily in Mexican operations to preserve U.S. market access under the USMCA rules of origin.

"What we are seeing is not reshoring but nearshoring, with a Chinese intermediate-goods layer underneath," said Ana Ferreira of the Atlantic Commerce Institute. "The final assembly moves closer to the consumer. The upstream supply chain remains where it was."

India has been the other big winner. Electronics manufacturing has grown at 22% annually for three years, driven by Apple's supplier diversification and domestic demand. Semiconductor assembly and test facilities are under construction, though leading-edge fabrication remains years away.

Vietnam continues to absorb labor-intensive manufacturing, particularly in apparel, footwear, and consumer electronics. Its share of U.S. imports has tripled since 2018. Infrastructure constraints are becoming binding, and power shortages in the north have disrupted production.

The U.S. itself has seen substantial investment in three categories: semiconductors (driven by CHIPS Act subsidies), electric vehicles and batteries (driven by IRA credits, now partially rolled back), and pharmaceuticals (driven by both policy and post-pandemic risk assessment).

Total announced manufacturing investment in the U.S. has reached $1.4 trillion since 2021, but the pace of groundbreakings has slowed sharply in 2026 as policy uncertainty has grown. Several major semiconductor and EV projects have been delayed or scaled back.