“While it sounds like an election year bumper sticker, the phrase ‘Made in America, for America’ could describe the foreseeable future of manufacturing in the Western hemisphere,” notes Patrick Van den Bossche, partner and lead author of the report. “However, that doesn’t mean China and other producer nations are sitting idly by as more and more nearshored goods flow into the U.S. market. Our research shows an emerging correlation between the uptick in U.S. imports from non-Chinese Asian countries and the rise in imports these countries see from China. China is now running trade surpluses with Vietnam, India and Thailand, which in turn are running widening surpluses with the U.S.”

The index shows that American, Canadian and Mexican production continues to take market share away from Asian countries, including China. U.S. imports from 14 Asian countries declined by $143 billion, from $1.02 trillion in 2022 to $878 billion in 2023, while domestic manufacturing gross output (MGO) stayed essentially flat. The majority of the drop in Asian imports was caused by a whopping 20 percent reduction in Chinese imports. However, for the first time since the inaugural Reshoring Index in 2013, some non-Chinese Asian countries, including Vietnam and Malaysia, also saw a dip in imports.

The report found that imports from Canada have steadily increased since the pandemic, keeping pace with Asian imports. Imports from Mexico have also increased. Last year, for the first time since 2013, Mexico surpassed China as the largest exporter to the U.S. Mexican-made goods imported into the U.S. grew by 32 percent, from $320 billion to $422 billion.

“U.S. investments in reshoring remain strong, but despite receiving considerable support from both the private and public sectors, domestic manufacturing still faces considerable hurdles, including a lack of skilled workers, labor costs and infrastructure challenges,” notes Omar Troncoso, a partner in Kearney’s consumer and retail practice and co-author of the index. “Our research nonetheless shows that the vast majority of leaders looking to bring their manufacturing operations closer to the domestic market are considering the U.S. This year’s index shows continued strong interest from CEOs in reshoring and nearshoring. …In addition, China’s growing presence in Mexico is testimony to China’s intent to remain a fixture in the U.S. imports picture.”

That said, U.S. companies and consumers are truly starting to “buy American,” adds Van den Bossche. Kearney’s U.S. Self-Sufficiency Index, which tracks how what’s made in the United States for the U.S. market compares against what’s imported and stays in the U.S. market, gradually declined from 2013 to 2020, but started flipping modestly in 2021 and increased by 5 percent between 2022 and 2023.