Tariff turbulence spurs surge in US manufacturing moves

By October and November 2026, manufacturers were planning in a trade-policy environment that had become harder to read. KPMG International said economic pressure and trade uncertainty were accelerating the shift, and KPMG Canada’s 2026 manufacturing survey showed that 42 per cent of companies had moved or were planning to move production south; among those considering relocation, 77 per cent expected to move within two years, reflecting how quickly firms were reacting to uncertain tariff and tax conditions.

That uncertainty was reinforced by U.S. tariff changes and stalled U.S.-Korea trade talks. One analysis cited “Liberation Day in April” with a potential maximum overall tariff rate of 30%, then an equilibrium of 15.4% tariffs coming into this year, and later tariffs at 10.6%; Fortune said 2025–2026 policy actions were weakening predictable investment rules after Trump’s April 2025 announcement of Liberation Day tariffs, the Supreme Court struck down much of the initial tariff regime in February, and 150-day emergency measures followed. Delayed deals also mattered because investment was tied to section 232 agreements, with 232 agreements and another 20 billion in Taiwan-related announcements shaping manufacturing and battery-sector decisions.

Manufacturers are not treating reshoring as a one-off patriotic pivot but as a rolling portfolio decision, constantly recalibrating what stays offshore, what moves closer, and what must be built domestically as compliance, transport and geopolitical conditions change. That logic is now visible in hard survey evidence: the 2026 USA Reshoring Survey, polling 249 manufacturers including 118 OEMs and 131 CMs, found respondents citing “risk arising from geopolitical turmoil, including high tariffs and other trade restrictions,” while “Fifty-three percent of surveyed CMs said that’s driving customers to seek domestic suppliers, up sharply from 24% in 2025.”

The response is diversification rather than simple retreat, with companies adding second suppliers, split-shoring production and selectively onshoring components where tariff exposure looks too unstable to anchor a business case. SupplyChainBrain reported that “60% said importers from China or Taiwan ‘were at least discussing’ reshoring as a means of mitigating risk,” while another market discussion put the cost pressure plainly: “the tariffs are going to come in globally anywhere from basis 10%,” and “most deals are kind of coming in between the 15 and 20% range”; in batteries, that has translated into U.S. production of “key components of a batteries like the membranes that separates the cathode from the anode,” described as “100% made in the US.”

Korean battery makers’ North American rethink is increasingly about reducing exposure to a business model tied too tightly to the AMPC and to EV-policy support. Digital투데이 captured that inflection point by describing the sector as approaching a “crossroads over AMPC tax credit defence line,” and the operating response became clearer after the Trump administration and Republicans “ended the tax credit of up to $7,500 for new EV buyers at the end of last September,” a move that caused EV sales to plunge and undermined the assumptions behind earlier U.S. expansion plans.

That demand shock is now pushing capacity toward energy storage rather than pure EV growth. Chosunbiz reported that SNE Research put North American EV sales at 954,000 units from the start of the year through August, down 24.9% from a year earlier, and said LG Energy Solution, Samsung SDI and SK On “scrapped plans one after another” for joint plants with GM and Ford; at the same time, expectations that Democrats would expand grid and ESS investment and restore renewable-energy tax credits created a clearer alternative outlet for battery production.

Hyundai’s vulnerability starts with the sheer permanence of what it is building in the United States. The Korea Times reported that Hyundai pledged to commit $26 billion for investment in the U.S. between 2025 and 2028, including a planned Louisiana steel mill scheduled to begin operations in 2029, while the Hyundai Motor Group Metaplant America has already opened in Georgia; together, those projects turn trade strategy into sunk industrial geography, locking the company into long-lived assets built around expanding localized production and limiting how quickly it can reposition if Washington rewrites the rules.

That matters because the policy risk is not confined to a single tariff headline but extends to how tariffs are calculated and administered, as well as labor and origin conditions attached to market access. As Shin Won-kyu told The Korea Times, “Plants cannot easily be moved once built, while tariff rates or calculation methods can change with a single proclamation,” leaving Hyundai exposed to tariffs of 15 percent on Korean automobiles and 50 percent on steel, with Republicans relying more on tariffs and Democrats favoring subsidies plus stricter labor and origin requirements that fixed factories and supply chains cannot easily reconfigure around.