Don Nelson, Senior Vice President of Operations at PRIDE Industries, was interviewed recently by Electronics Manufacturing News. In Part One of this two-part interview, Don outlines the benefits of reshoring and the impact of tariffs. He also shares which factors to consider when determining whether or not to reshore manufacturing. Already know that your company needs to reshore? Then see Part Two of this interview to get actionable advice for successful reshoring.
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Electronics Manufacturing News (EMN)
When does it make sense for a company to reshore?
Don Nelson
Put simply, it depends on the math.
The impact of tariffs has been a lot like COVID’s—they’ve shown just how shaky and unpredictable the global supply chain can be. And just like the pandemic, tariffs aren’t going away.
Part of what’s driving a return to domestic production is the fact that the incentives to offshore are so much less compelling than they were a decade or so ago. Twenty years ago, material and labor costs were markedly lower in some countries than in the U.S., and shipping costs were reasonable. And if you happen to be in an industry where that’s still the case, then maybe you don’t want to change anything.
But for most companies today, the math has changed. All those costs are higher now. And there are new complications—extreme weather, tariffs, and geopolitical uncertainty. In this type of environment, it makes sense for companies that sell a lot to the U.S. to move at least some production here if they can, so that they don’t have all their eggs in one basket.
EMN
What are some costs and risks of reshoring?
Don
Reshoring does have its risks, which is why manufacturers need to plan carefully. If you’re building factories, that’s a big capital investment. It may be simpler to start by using a domestic contract manufacturer, which lets you retain more flexibility, should you decide to offshore at a later date.
Another issue is the cost structure, which can be different domestically than abroad. Labor costs have generally been higher in the U.S. than in typical offshore countries, but that’s changing—foreign wages have been moving up in recent years, so that advantage is eroding.
There’s also the issue of supply chain realignment, finding new sources for materials and components. Here again, you can get around this problem by contracting with a manufacturer that’s already well-established in the U.S., so that you can take advantage of its existing labor and materials ecosystem.
EMN
Regulatory compliance must be easier with domestic facilities, right? And is it easier to control quality?
Don
Not necessarily. Look, there are plenty of good reasons to reshore, but I don’t think compliance is one of them. A product that’s sold in the U.S. has to meet certain standards whether it’s made here or in Vietnam.
It is true that—for some companies—quality control becomes easier when they reshore, if only because it’s a lot less hassle to fly to another state in the U.S. than to get your personnel halfway around the world for a product inspection at a contract manufacturer.
EMN
What are the most significant benefits that companies can reap when they reshore manufacturing, particularly in terms of mitigating the impact of tariffs on their businesses?
Don
I think there are a couple of things to keep in mind when it comes to tariffs. First, the impact of tariffs has been a lot like COVID’s—they’ve shown just how shaky and unpredictable the global supply chain can be. Second, just like the pandemic, tariffs aren’t going away. They’re pretty much the new normal now, popping up all over the world and making it tough to plan ahead.
Bringing production back closer to home lets companies avoid some of those tariff headaches. It also means they’re not as exposed to sudden cost spikes or new trade rules, so pricing is more stable and predictable. Plus, reshoring can give companies a lot more control over operations, which lets them react faster if something unexpected happens—even if that something is positive, like adjusting to unexpectedly high demand.
Another advantage of reshoring is greater control over shipping costs. Bad weather, geopolitical uncertainty, port delays—that can all make shipping expensive and unpredictable. Reshoring pretty much eliminates that headache. The bottom line is that reshoring makes supply chains stronger and more flexible. Keeping production close means companies are better able to ride out the next pandemic, or weather a catastrophe, or cope with a new tariff, or whatever. You’re just on a more solid footing.
EMN
Let’s take a deeper dive into logistics. Specifically, how does reshoring help companies reduce logistics and shipping costs, and why is this especially important in a high-tariff environment?
Don
First off, if a company wants to cut shipping and logistics costs, reshoring is one of the most effective moves they can make. Bringing production closer to your main markets saves on the long-haul freight bills—that’s about 20–30% savings on transportation alone. It also avoids the headaches that come with unpredictable shipping schedules, port delays, and customs bottlenecks. In a high-tariff environment, this is even more critical—by manufacturing domestically, you sidestep those hefty import tariffs that can eat into your margins overnight.
Shorter supply chains also mean a company can run leaner on inventory. With faster lead times, you don’t need to tie up as much cash in safety stock or oversized warehouses. Inventory strategies run across a spectrum, from just-in-case to just-in-time. Reshoring lets a company move closer to a just-in-time approach, which lowers warehousing costs and reduces the risk of excess or obsolete inventory.
Another reshoring plus: Domestic facilities can leverage advanced automation and smarter layouts, so you get more out of every square foot of warehouse space. And going back to tariffs—don’t forget about free trade zones. Companies can leverage FTZs to defer or maybe eliminate certain duties on imported components. FTZs are another tool in the toolbox, and these days, companies have to use every tool at their disposal.
EMN
In your experience, how does reshoring improve quality control and compliance with local regulations compared to overseas manufacturing?
Don
I always say that reshoring isn’t just about geography, and that’s especially true when it comes to things like quality and compliance.
When companies decide to reshore their manufacturing, they often see a big boost in quality control and regulatory compliance. Think about it—having production closer to home means you can keep a much closer eye on things. Instead of relying on reports and delayed feedback from overseas factories, you’re right there, able to spot issues early and take corrective actions quickly. That kind of hands-on oversight really cuts down on defects and keeps quality consistent.
Plus, reshoring makes compliance with local regulations way more straightforward. Local teams and subcontractors already know the ins and outs of the regulatory environment—they understand the standards and expectations already—so there’s less guesswork and fewer surprises. And being able to work directly with local subcontractors means that communication is smoother, another thing that helps ensure everyone is on the same page regarding compliance and quality standards.
All of this adds up to a manufacturing process that’s more transparent, agile, and aligned with both quality goals and regulatory demands. So, reshoring isn’t just about geography—it’s a smart move for tighter control and peace of mind.
EMN
For executives considering reshoring, what are the most common pitfalls to avoid, and how can they set their reshoring initiatives up for long-term success?
Don
One of the biggest pitfalls executives face when reshoring is underestimating the true complexity of the transition. It’s not simply a matter of moving production back home; local supply chains, labor availability, and regulatory requirements can look very different from overseas operations. Many companies also overlook hidden costs—like hiring or retraining their current workforce, qualifying new suppliers, or investing in automation. Any of these factors can erode the expected gains if not accounted for early.
Another common misstep is treating reshoring as a one-time tactical project instead of a long-term strategic shift. That mindset often leads to piecemeal investments rather than building a resilient, future-ready operation.
The organizations that succeed are the ones that approach reshoring holistically. They map the full supply chain, model total landed costs, and build strong relationships with domestic suppliers before committing to large-scale moves. They also invest in technology—automation, data analytics, and digitalized operations—to offset higher labor costs and ensure consistent output. Perhaps most importantly, successful companies align their reshoring strategy with broader business goals, whether that’s improving customer responsiveness, strengthening resilience, or accelerating innovation. Reshoring done right isn’t just about geography; it’s about creating a manufacturing system that can scale, adapt, and compete in the long run.
EMN
Is there anything else you’d like to add? Any parting words of advice for electronics manufacturers who want to reshore manufacturing?
Don
Tariffs definitely play a role in reshoring decisions, but if tariff concerns are the main reason you’re thinking of reshoring, think again. Tariffs can create short-term cost pressures and uncertainty, but executives need to think long term. For many companies, it’s hard to justify uprooting global supply chains solely on the possibility of future tariff volatility.
The reality is that there are a lot of other good reasons to reshore. And in my opinion, lead time reduction is at the top of the list—being closer to end customers means faster response to design changes and smoother alignment with just-in-time production models. Supply chain resilience is another factor. The pandemic, port bottlenecks, and geopolitical tensions underscored the vulnerability of overextended supply chains. There’s no question that reshoring is a way to mitigate these risks.
In addition, labor dynamics are shifting. The wage gap between traditionally low-cost regions and North America has narrowed, while automation and advanced robotics are offsetting higher local labor costs. Finally, customer expectations around sustainability and traceability favor shorter, more transparent supply chains. The bottom line is, while tariffs are a consideration, reshoring decisions are really about strategic flexibility, risk management, and staying competitive over the long term.