Morgan Stanley Finds Little Reshoring One Year Into U.S. Tariffs
Despite a year of tariffs, Morgan Stanley analysts say supply chain rerouting has outpaced any meaningful return of domestic manufacturing.
One of the central promises of aggressive U.S. tariff policy was that higher import costs would compel American manufacturers to bring production back home. A year into that experiment, Morgan Stanley analysts have delivered a sobering verdict: the evidence of reshoring remains thin at best.
Rather than spurring a domestic manufacturing renaissance, tariffs appear to have accelerated supply chain reorientation — meaning companies have largely shifted where they source imports rather than eliminating foreign dependence altogether. The analysis suggests the U.S. economy has, counterintuitively, grown more reliant on imports over the period, not less.
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The numbers underscore the gap between policy intent and economic reality. Sectors that showed any meaningful reshoring activity contributed only about 1.1% to domestic supply growth. By contrast, offshoring activity still contributed approximately 1.4% in volume terms — outpacing the domestic gains and suggesting that global production networks remain stubbornly difficult to repatriate on a short timeline.
The findings point to a structural challenge that tariffs alone cannot easily solve: domestic manufacturing capacity cannot be conjured quickly. Building new factories, training workforces, and establishing supplier ecosystems takes years, if not decades. Tariffs may raise the cost of foreign goods, but they do not instantly create the infrastructure needed to replace them at home. Morgan Stanley's data implies that, so far, the primary effect has been trade diversion rather than genuine industrial revival.
For policymakers and investors watching the reshoring narrative closely, the Morgan Stanley assessment serves as a calibration check — a reminder that supply chain transformation operates on a far longer horizon than a single fiscal or political cycle. Continue reading at Investing.com
