Manufacturing Reality Check: Why ‘Made in USA’ Is Almost Impossible

By Hiten Shah, President & CEO – MES

In today’s climate of global instability and trade uncertainty, the call to bring manufacturing “back home” has reached a fever pitch. “Reshore everything” is a slogan gaining political momentum and populist appeal—but the reality is far more complicated. In this honest, no-fluff take, our
CEO Hiten Shah dives into the real challenges of U.S.-based manufacturing, and why reshoring is not as easy—or even as viable—as many hope.

For years, business leaders and policymakers have expressed frustration with global manufacturing dependencies, particularly on China and Southeast Asia. The COVID-19 pandemic only intensified these concerns, exposing fragile supply chains and over-reliance on overseas production. Disruptions in everything from medical equipment to microchips became daily headlines, sparking a renewed wave of interest in domestic manufacturing. But while the idea of “Made in USA” sounds ideal, few truly understand what it takes to make that a functional, scalable reality.

The first and most pressing issue is labor. The U.S. manufacturing labor market is facing a crisis of both availability and affordability. The workforce is aging, and younger generations are largely steering away from industrial and technical careers. Skilled labor—particularly in areas like precision machining, electronics assembly, and complex manufacturing systems—is not just expensive, it’s increasingly scarce. The talent gap is widening, with many manufacturers struggling to fill even entry-level production roles. This shortage places immense strain on any efforts to scale operations domestically. While automation continues to advance, it cannot fully replace human expertise, especially in industries that demand flexibility, customization, or rapid changeovers. Automation is a powerful enabler, but not a complete solution.

Infrastructure is the second major hurdle. Although the U.S. leads in innovation and high-tech sectors, its industrial infrastructure has not kept pace. Many facilities are outdated, lacking the modern equipment, layout efficiency, and environmental controls needed for world-class manufacturing. Additionally, logistics and transportation infrastructure—such as regional distribution networks, intermodal rail hubs, and port access—varies greatly by geography. For businesses located outside of established manufacturing corridors, these gaps can severely limit their ability to scale, deliver on time, and compete with global suppliers. Local zoning restrictions, permitting delays, and compliance requirements also create friction that slows investment and execution.

Then there’s the issue of cost. Manufacturing in the U.S. is simply more expensive—across every major input. Labor costs are high, energy rates can be volatile, and environmental compliance is more rigorous than in many competing countries. Add to that the cost of
healthcare benefits, facility maintenance, and raw materials sourced at higher domestic premiums, and the economics of reshoring start to break down quickly. In contrast, countries like India, Vietnam, and Mexico offer lower labor rates, growing industrial capacity, and increasingly stable infrastructure—often with active government incentives for foreign manufacturers. For companies in tight-margin sectors like consumer electronics, automotive parts, and retail packaging, these cost differentials aren’t minor—they’re make-or-break.

Hiten Shah underscores a sobering truth: “The idea of ‘Made in USA’ is noble, but the execution is a nightmare unless we solve for labor, infrastructure, and cost at a systemic level.” While reshoring sounds patriotic, without major structural reforms, it remains largely aspirational. It’simportant to note that these challenges aren’t new—but what has changed is the urgency with which they’re being discussed. As global trade becomes more politicized and supply chain risks increase, businesses are under greater pressure to rethink their global sourcing strategies.

So, what’s the path forward?

Rather than romanticizing a complete return to domestic production, Hiten advocates for a more balanced and strategic approach: global sourcing that emphasizes resilience, agility, and risk management. This means embracing multi-shoring models—where companies blend offshore, nearshore, and onshore production capabilities based on the product, region, and timeline involved. For example, mission-critical components or IP-sensitive parts might be sourced closer to home, while high-volume, low-margin items can still be produced offshore to maintain profitability.

Nearshoring, particularly to Mexico and Central America, is also gaining traction as a middle ground—offering reduced transit times, lower geopolitical risk, and greater cultural alignment, while still benefiting from cost efficiencies compared to full reshoring. Digital tools like supply  chain visibility platforms, AI-driven sourcing systems, and collaborative ERP ecosystems make this type of diversified model more feasible than ever before.

Ultimately, this strategy is about future-proofing. In an era defined by constant disruption—whether from pandemics, trade wars, or climate events—putting all your production capacity in one region is a recipe for disaster. Diversification isn’t just a financial principle—it’s
now a supply chain imperative.

Hiten’s advice to business leaders is direct: don’t make supply chain decisions based on politics or emotion—make them based on data, risk tolerance, and strategic flexibility. While reshoring may become more viable in the future with the help of tax incentives, workforce development programs, and smart infrastructure investment, most companies can’t afford to wait. They need solutions that work now.

Reshoring may not be impossible in the long term, but for most organizations today, it’s not economically viable without fundamental change. As Hiten explains, leaders must shift from reactive rhetoric to proactive strategy—and that starts with confronting the hard truths. It also starts with asking the right questions: Where are we most vulnerable? Where can we add redundancy? What’s the cost of disruption versus the cost of diversification?

“Smart sourcing isn’t about where your factory is—it’s about how quickly you can shift when the unexpected happens,” Hiten says. And in a world where volatility is the new normal, that speed and flexibility may be the most valuable asset of all.

Watch the full video from Hiten Shah https://vimeo.com/1088531670

Contact MES for a sourcing strategy consultation.