The CNBC Supply Chain Survey has found that companies are unlikely to reshore manufacturing to the U.S. due to the high costs associated with President Donald Trump’s tariffs, instead opting for “globe-hopping” to lower-tariff countries.
The survey, conducted from April 7-10, 2025, among 380 respondents from companies in the supply chain and business organizations, found that over half (57%) of the respondents cited cost as the biggest headwind in relocating supply chains to the U.S. Furthermore, 21% identified finding skilled labor as the top challenge. The Trump administration has been advocating for reshoring and using tariffs as leverage, but the survey results contradict the administration’s claims of a reshoring boom. Only 14% of respondents chose taxes as the biggest challenge in deciding whether to relocate manufacturing to the U.S.
Most companies estimated that the price tag of building a new domestic supply chain would be around double (18%) or more than double (47%) current costs. Instead of moving supply chains back to the United States, it would be more cost-effective to relocate them to lower-tariffed countries, according to 61% of respondents. “The U.S. labor market is a concern when considering movement back to the U.S.,” said Mark Baxa, CEO of supply chain trade group CSCMP. If manufacturing is coming back to the U.S., automation will be a major component of the economic model, with 81% of respondents saying they would use it more than they would human workers.
Layoffs are an immediate concern, with respondents almost evenly split between those who said they are planning head count reductions (47%) and those who say they do not have current layoff plans (53%). To a more general question of how long firms will “wait to make staffing decisions,” the majority said no longer than nine months — 38% indicated within two to three months; 23% over the next three to six months. The most widespread reaction to the Trump tariffs is the cancellation of orders, according to 89% of respondents, and an expectation that consumers will pull back on spending, which 75% of respondents said they are forecasting.
“The immediate impact is order cancellations and the risk of consumer spending pullback is noteworthy,” Baxa said. For products that are coming in under the new tariff rates, 61% of those who participated in the survey said they would raise prices. Survey respondents expect the hardest-hit products as a result of a pullback in consumer spending to be discretionary products (44%), furniture (19%), and luxury (19%). Paul Brashier, vice president of global supply chain at ITS Logistics, noted that they have seen a heavy cancellation or pause rate for freight originating from China but are seeing increased volumes and front loading from other countries in Asia.
Sixty-three percent of respondents warn of a recession affecting the U.S. economy this year as a result of Trump’s tariffs policy, with roughly half (51%) expecting a consumer pullback to hit in Q2. Steve Lamar, CEO of the American Apparel & Footwear Association, said, “Supply chains that support millions of U.S. jobs, power U.S. manufacturers, and provide affordable choices for U.S. consumers are now experiencing early signs of damage due to these destructive tariffs.” Kevin Hassett, Trump’s National Economic Council Director, claimed that more than 10 countries have made “amazing” trade deal offers to the United States and he “100%” guaranteed there is no recession coming.
BlackRock CEO Larry Fink said that based on conversations he has had with CEOs across the economy, the U.S. is either very close to or already in a recession now. Smaller businesses and startups say the tariffs will be catastrophic and place U.S. jobs at risk. Bruce Kaminstein, a member of NY Angels and founder and former CEO of cleaning products company Casabella, stated, “Small consumer companies that started with an innovative idea do not have the capital to invest in building factories. They were forced to go overseas because of a lack of production facilities here in the U.S.”
The survey also found that companies are preparing for a cautious consumer, with a greater focus on lower-priced goods for the holidays (67%), and more promotional items (21%). Aspirational luxury (7%) and luxury (5%) ranked last among holiday season order planning.
