In early April 2025, President Donald Trump issued Executive Order 14257 (“Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits”).
At the same time, the President took to the airwaves to announce, “Liberation Day.” During his speech, Trump said that the reciprocal tariffs would encourage the “reshoring” of U.S. manufacturing.
The assumption was that American companies operating overseas would immediately return to the U.S. to save costs, investing their capital in facilities and jobs. However, experts shared their reality checks with Connect CRE, explaining that 1) reshoring has been occurring for years, and 2) the process is long-term.
“Reshoring has been contributing to steady baseline industrial demand, particularly for manufacturing-adjacent and regional distribution space,” said Jordan Nathan, Faropoint’s Head of Corporate Investments. “But it hasn’t been sufficient to offset the volume of new supply delivered over the past few years.”
The Reshoring Resurgence: Already Underway
Reshoring is the opposite of offshoring, a manufacturing business practice that has been in place since the mid-20th century. At the time, manufacturers relocated their production operations to lower-cost countries. However, beginning in the mid-2000s, costs in these countries rose, driving many manufacturers back to the U.S. More companies returned as the pandemic uncovered international supply-chain vulnerabilities.
These days, “reshoring, nearshoring and supply-chain diversification continue to support industrial demand, particularly for manufacturing, distribution and logistics space in select U.S. markets,” said Northmarq Regional Managing Director Ryan Butler.
One question is whether reshoring has ramped up since Liberation Day. The answer is somewhat mixed, depending on the source. According to a KPMG survey conducted in October 2025, 63% of companies said they were considering reshoring their operations to the U.S. However, only 10% have taken specific action to do so.
Additionally, Jeff Thornton explained that a four- to five-month lag in industrial leasing occurred in the months following Liberation Day. “Tenant decision-making was slow,” said Thornton. “We saw a definite decline in new deals, renewals and expansion.” This changed, as occupiers were pushed into strategic decision-making. “Leases started to pick up, and absorption started to increase,” said Thornton, Centerpoint’s Executive Vice President and Head of the Central Region.
Nearshoring also appears to be bolstered by consumer spending and corporate investment, according to Elizabeth Holder, industrial senior analyst with JLL. “The tangible effects of nearshoring are visible as government incentives continue to accelerate the development of U.S.-based manufacturing options,” she added.
More Than Factories
However, manufacturing involves more than factories that produce goods. A successful manufacturing concern requires multiple reliable inputs, including labor and materials.
The KPMG survey found that tariffs increased materials costs, leading to fewer new hires. Respondents also said that, despite hiring pauses, they’re investing in improving their workforces’ skills through specialized training.
At the same time, profitable manufacturing relies on reliable supply chains and dependable logistics. To that end, 62% of respondents to the KMPG survey said they were reconfiguring their supply chains to improve efficiencies.
BGO’s Steve Reents isn’t surprised by this, pointing out that tariff uncertainty has also led to overall increases in logistics and transportation. “Supply-chain diversification is reshaping how logistics space is utilized and where it’s located,” said Reents, who is his company’s Managing Partner, Deputy Head of U.S., and U.S. Chief Investment Officer.
In fact, such diversification has been ongoing since the pandemic’s aftermath, generating a high demand for tech-enabled industrial facilities that provide quicker, more efficient regional fulfillment, he added.
Looking Ahead
According to Reents, “reshoring, nearshoring and supply-chain diversification will continue to impact industrial real estate demand in 2026, functioning more as a structural tailwind than a short-term surge.” As a result, reshoring should continue driving demand for modern industrial warehouses and advanced manufacturing facilities, he added.
Thornton agreed, pointing out that the need and demand for manufacturing, logistics, and warehouse space will continue to be prevalent in port markets such as Southern California, Savannah, GA, and New York/New Jersey. “We’ll also see this happening in inland port areas like Dallas, Chicago and Atlanta,” he commented.
Reshoring will also impact raw material providers and their logistics networks, as “3PL users continue to aggressively expand their footprints to help manage the demands of domestic manufacturing and the unrelenting growth of e-commerce,” Holder said.
The caveat, however, will involve inputs, especially labor. “The competition for skilled labor, from specialized warehouse workers to construction tradespeople, will likely intensify and may place pressure on wages and project timelines upward,” Holder said.
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