Reshoring Auto Manufacturing: Opportunity for Plastic Parts Manufacturers in Rebuilding U.S. Production
After decades of offshoring, U.S. automotive manufacturing is poised to make a comeback. The foundational shift began as a defensive move against new tariffs and trade uncertainty. As the situation continues to evolve, major automakers are increasingly reshoring manufacturing facilities and supply chains to increase U.S. production capacity.
Plastic parts suppliers in the automotive value chain will face several opportunities and challenges as the industry restructures, but those that can offer reliable domestic production will have a strategic advantage over international partners while supply chains relocate.
From Offshoring to Reshoring: Why U.S. Auto Manufacturing Is Coming Home
Automotive manufacturers previously enjoyed the benefits of free trade policies and a global supply chain, chasing lowest-cost manufacturing around the world to lower consumer prices for finished vehicles and increase profits. In 2025, the introduction of new tariffs disrupted the status quo.
In 2025, a 50 percent tariff on steel, which makes up approximately half the weight of internal combustion engine vehicles, alongside a 25 percent tariff on vehicles built outside the U.S. took effect. Additional tariffs were also applied to imports and exports with specific countries, including some reciprocal tariffs. The evolving tariff situation has inspired major strategic changes by automotive OEMs to reshore manufacturing and supply chains to the U.S.
USMCA Subsidizes North American Production, For Now
The current terms of the United States-Mexico-Canada Agreement (USMCA) provide a bit of leeway on imports and exports between the three countries, encouraging some automakers to prioritize North American supply chains, not just domestic ones.
USMCA content is exempt from the 25 percent tariff at border crossings until a process to apply tariffs to non-U.S. content is established. Importers of automobiles under USMCA will then be allowed to certify U.S. content and the tariff will only apply to the value of non-U.S. materials used. Transshipping through Mexico and Canada will still result in a tariff charge.
Automakers relying on the USMCA to guide strategy should be aware that the agreement is up for its first review next year. Talks to extend the agreement must begin by July 1, 2026, or the agreement will terminate in 2036. Should the U.S., Canada and Mexico fail to extend the USMCA, automakers will likely need to restructure again based on anticipated trade conditions. OEMs are already bracing for changes by reinforcing their U.S. presence, investing in local production hubs and tightening supplier networks to meet both policy requirements and market demands.
OEMs Lead the Reshoring Effort with U.S. Auto Investments
Automakers are not just declaring their intent to localize supply chains; they are committing billions to U.S. expansion. General Motors (GM), for example, recently announced a $4 billion investment to boost U.S. manufacturing, including shifting production of popular models like the Silverado, Sierra and Equinox from Mexico to plants in Michigan, Kansas and Tennessee. While Mexican operations will remain active for lower-cost vehicles, GM’s reallocation represents a deliberate pivot toward building higher-margin products on U.S. soil.
Similarly, Ford’s BlueOval City campus in Tennessee is gearing up to begin full-scale production of EVs and batteries and Toyota has already begun shipping batteries from its new EV battery plant in North Carolina. New facilities are prioritizing production of automotive technologies and components, signaling increased demand for domestically produced parts that meet stringent content and quality requirements.
Domestic Manufacturers Can Capitalize on the Comeback
The resurgence of U.S. automotive manufacturing extends beyond assembly lines to the entire supply chain. As OEMs localize production, suppliers are increasingly expected to follow suit to maintain close proximity to end-product manufacturing plants and reduce cross-border complications. New facilities are being built to support the industry’s reshoring goals.
One facility in San Antonio, Texas will produce plastic pallets, crates, pails, containers and packaging for batteries to support manufacturing supply chains for Toyota, Tesla and others. This site is well-positioned to capture new business as U.S. production capacity increases. Similar U.S. facilities will likely see similar benefits, including increased business and production demand.
But before they can benefit, plastic parts manufacturers will face increased pressure to prove the North American content on their products to qualify for tariff exemptions under USMCA. Suppliers will need to quickly adapt to evolving certification processes and customs requirements to take full advantage of emerging opportunities.
Adding to the complexity, costs are increasing across the board, squeezing profit margins and potentially limiting the resources suppliers can devote to innovation and research. While recent government policy updates introduced modest reimbursement programs for domestic producers importing parts, these are temporary and will gradually phase out, making long-term planning essential to ongoing business success.
Positioning Plastic Parts Manufacturers for Success in the Reshoring of U.S. Automotive Manufacturing
The rebuilding of U.S. auto production represents a major turning point for the industry and its suppliers. As manufacturing returns to U.S. soil, plastic parts suppliers have a unique opportunity to deepen partnerships with OEMs by delivering certified, high-quality, locally sourced components. Adapting to the reshored reality will be critical to winning and retaining business.
M. Holland has a wealth of experience navigating specific sourcing requirements for the automotive industry. Visit the Automotive market page to explore how we can help reinforce the domestic automotive supply chain.
Frequently Asked Questions
1. How do the 2025 tariffs impact automotive plastics suppliers?
The 2025 tariffs significantly increase the cost of importing vehicles, steel and parts from outside the U.S. manufacturers of plastic products now face heightened pressure to prove North American content to qualify for tariff exemptions, making domestic production a competitive advantage.
2. What are the key USMCA requirements for automotive parts manufacturers?
Under USMCA, automotive parts must meet specific regional value content thresholds to be tariff-exempt. Suppliers must certify the U.S. content of their products and stay current with evolving customs requirements, especially as the agreement approaches its 2026 review.
3. What steps can plastics manufacturers take to align with OEM reshoring strategies?
To stay competitive, plastics manufacturers should invest in U.S.-based production and establish closer geographic proximity to OEMs. Early adaptation to new certification and compliance processes will also position suppliers to win more contracts.
4. Are the U.S. reshoring trends expected to continue long-term?
Yes, while some policy details may change, the overall trend toward reshoring is driven by long-term strategic goals like reducing supply chain risk and increasing domestic content. OEMs are making multibillion-dollar investments in U.S. facilities, signaling sustained momentum.