A recent AlixPartners study indicates that a majority of North American companies are reducing their exposure to China. Of the surveyed companies, nearly 75% have already begun to decrease their exposure, with over 50% planning to reduce it by over 10% in the coming year. Most aim to cut down their sourcing from China by 40%. The U.S. and Mexico are emerging as primary beneficiaries of this shift.

These findings align with other reports. Recent regulations and legislations in the U.S., such as the CHIPS Act, are driving nearshoring trends. Accenture also reported that 85% of companies plan to manufacture and sell within the same region by 2026, up from the current 43%. U.S. firms are making significant investments in moving operations and anticipate even more spending in the upcoming years.

The move towards nearshoring is driven by overall costs and risks. While China is no longer the cost leader, challenges like labor availability and location selection persist. Additionally, although many U.S. firms are aware of potential federal incentives, only 42% plan to utilize them.