The Trump administration’s tariff policies have exerted pressure on companies to invest in building manufacturing facilities domestically, or face the potential ire of the government.
Trump’s “Liberation Day” tariffs, an executive order imposing a 10% baseline tariff on imports from nearly all countries, was enacted in April of 2025 and implemented in August of the same year. The initiative aimed to raise prices on imports so that countries would be motivated to reshore their manufacturing from abroad and build up facilities domestically. Since its passing, the policy has upended the global supply chain order, precipitating a trade war and series of negotiations with allied and hostile countries alike, including China, Canada, and Mexico.
But nine months after “Liberation Day,” economists say the tariffs have not had the desired effect that President Trump had hoped for in terms of getting companies to reshore their manufacturing centers. While semiconductor and chip manufacturing companies might be reaping the benefits of increased demand from the AI boom, the majority of companies are finding ways to circumvent tariffs, rather than reroute their manufacturing and supply-chain operations.
“I do not view Trump’s tariffs as simulating a massive reshoring boom, one that the President had envisioned, or even a small one. I would argue on the contrary,” said Larry Werthers, chief U.S. economist at Daiwa Capital Markets America. He said that while the U.S. is certainly expanding its chip manufacturing capacity as a result of tariffs, there’s still a “significant disconnect” between the current reality and what Trump envisions.
“Tariffs, while they have been a significant source of new revenues for the federal government, have probably constrained activity in the manufacturing sector,” he said.
But according to the White House, Trump’s tariff strategy has been immensely successful. The administration has kept a running tally of over 100 companies, predominately in the tech, pharmaceuticals, and automobile industries, that have vowed to reshore their operations. The largest pledge came from Apple at $600 billion, followed by further investments in the hundreds of billions from the world’s largest technology and semiconductor companies like Google, Amazon, and Taiwan Semiconductor Manufacturing Company. Drugmakers like Pfizer, AstraZeneca, Eli Lilly, and Novo Nordisk have similarly struck deals with the president to invest in American manufacturing in order to avoid pharmaceutical tariffs.
Yet the U.S. manufacturing sector is experiencing lackluster performance. Manufacturing jobs have decreased 0.5% from the same period the year before, reaching an all time low in December, while contracting 8% from the month before on a seasonally adjusted basis, according to data from the Bureau of Labor Statistics.
Similarly, factory jobs have been decreasing for three consecutive quarters and industrial production is up only marginally in the factory sector year over year.
Consumer sentiment does not appear to be faring much better. As of December 2025, only 36% of companies responding to the December 2025 Institute for Supply Management (ISM) survey said they were either planning on reshoring production to the U.S. from abroad, while more than half– 64% –said they had no plans to reshore.
Werthers said that while foreign direct investment from governments and companies alike will be a benefit, it remains to be seen how much money will ultimately find its way to the United States. “There’s a lot of unknowns surrounding these pledges,” he said.
Uncertainty around tariff policy and the ever-changing trade landscape has contributed to many companies deciding not to reshore, or to postpone their plans, because it can take years for new factories to come online and hire skilled workers. Even companies who have made reshoring pledges may find it less advantageous to move their operations if policies continue to shift.
In an April survey of 380 supply chain and business companies administered by CNBC, the “current administration’s inability to provide a consistent strategy” was included as one of the main concerns surrounding reshoring.
“We know of a number of clients who paused their reshoring plans due to the speed of change for the tariff landscape in the second quarter of this year,” said Jonathan Todd, a partner at the Cleveland-based business law firm Benesch, in a report by Global Finance.
During Trump’s first administration in 2018, researchers found that imposing tariffs on countries like China, Canada, Mexico, and the EU ultimately did not bring manufacturing jobs back to the United States. Rather than reshoring, importers found ways to circumvent the tariffs, moving their facilities to other countries like Vietnam.
Similar to 2018, companies are continuing to find ways to circumvent the tariffs rather than reshore, because the fact remains that labor is still cheaper abroad for many various industries. Companies may be more likely to absorb the tariffs, or pass down costs to consumers before deciding to change their manufacturing structures.
A New York Times report stated that tariffs have not had as much impact on the U.S. economy as the administration desired because more companies are evading the tariffs than expected. But Werthers said that he is not convinced evasion of tariffs is playing a role, as much as companies and countries are re-ordering trade in general to minimize tariff hits.
“There are also carve outs for specific industries and countries. Within the global ecosystem of trade and production you see some shifts going on,” he said.
The Supreme Court is expected to decide on Trump’s ability to impose tariffs under the International Emergency Economic Powers Act in the near future.