Recently, something peculiar happened in the world of international manufacturing. Vinfast, the Vietnamese electric automaker, decided to open a factory in the USA.
But wait — wasn’t it just a few decades ago that retailers were forced to outsource manufacturing to East Asia just to remain competitive? How can it possibly make more sense for a Vietnamese company to manufacture in the United States?
While the United States has made headlines for some particularly aggressive trade tactics throughout 2025, the US is not the only nation with a heavy dependence on foreign-made goods.
It seems both logical and way too simple to work in 2025: manufacturing the goods you sell to a market IN that market. Supply chains have spent the past half a century getting more complicated, spreading out all over the globe to make our goods cheaper.
Yet after the pandemic, many industries, in particular those in critical infrastructure, automotive, and tech, decided to reshuffle the deck by building manufacturing plants in the region they were planning on selling to.
Add the current tariff chaos to the mixing bowl, and you start to wonder; is manufacturing really going to go regional?
Between trade wars, rising wages, and political tension, the math doesn’t work like it used to. U.S. tariffs in particular — now hitting industries from consumer electronics to toys to textiles — are forcing companies to crunch new numbers. Every extra percentage point on duties can wipe out already thin margins.
Let’s take a look at which new locations are poised to become new hubs in global manufacturing and why now is the time to diversify.
Reshoring and Nearshoring: The Big “Comeback”
The U.S. is not the only place where manufacturing trends are shifting, but the aggressive U.S. trade policy of late has made the country somewhat of a microcosm for the trend.
Some industries are reshoring in the United States, and have been doing so already for years. Automotive, defense, and certain tech sectors (ie, semiconductors) are leading the charge, building plants in the U.S. or Mexico to dodge tariffs and protect critical supply lines.
Plus, the US already has favorable agreements and high trade volumes with many Latin American countries. Apart from the USA’s interest in the region as a “far-but-not-too-far-away” manufacturing hub, there is also a keen interest in taking advantage of the region’s key raw materials, such as lithium and copper.
Government incentives, like U.S. tax credits for domestic manufacturing, are accelerating the move.
Here’s the thing: not every industry can reshore. Apparel, low-cost consumer goods, and toys? Margins are too thin, labor is too expensive, and the infrastructure simply isn’t there to support large-scale U.S. production.
Instead, we’re seeing regional strategies emerge:
Manufacturing for the U.S. moves to Mexico or Central America.
Manufacturing for Europe shifts toward Eastern Europe or North Africa.
Manufacturing for Asia stays largely within Asia, but diversifies beyond China into Vietnam, Thailand, and Malaysia.
Manufacturing in Asia: Beyond Just China
China is still the top manufacturing nation and will likely maintain this position in the years to come, but many companies are now looking to insulate their supply chains. That means ensuring 100% of their production isn’t confined to a single nation.
Things have changed greatly in China over recent years. Subsequently, supply chains linked to China have been disrupted while costs and worker wages have both increased
This all comes on top of the recent roadblocks presented by COVID-19; in the spring of 2022 alone, lockdown measures in Shanghai left 90% of truck capacity out of service. It’s now clear that manufacturing in China is no longer as reliable or as cheap as it once was.
Many retailers are making moves to keep some production or distribution in China while setting up another outfit in a different region. And many countries in Southeast Asia — such as Vietnam, Thailand, and Malaysia — are implementing policies to attract those companies.
Southeast Asian countries have long been known for low-cost labor and cheap manufacturing. However, the region is now well-positioned to take advantage of a new trade pact, the Regional Comprehensive Economic Partnership (RCEP), as well as the following key trends:
Increased FDI from trade partners like China, Japan, and South Korea
Rising living standards in the region, creating an attractive new market for retailers
Retail desire to bring smaller production units closer to end-users
Mitigating risk by setting up production in South East Asian countries in addition to China
New markets, global trends, and favorable trade agreements can create the perfect environment for change. But there are still a few substantial barriers.
Recent research shows that the region will need to invest in new technologies to bring manufacturing into the future, and governments will need to implement policies favorable to trade. This is a pretty significant roadblock, as the region is behind when it comes to tech adoption in manufacturing processes.
And yet, the global supply chain is undergoing a paradigm shift. Investors are likely to soon be ready and willing to put new tech into practice to ensure future success. Countries in Southeast Asia have a tremendous opportunity now to develop strong multinational value chains — thus increasing investment and playing off of each other’s strengths.
Why Now Is the Perfect Time to Diversify Manufacturing
New technologies, new markets, and new supply chain strategies are creating a new set of possibilities for how you can run your supply chain.
Through the use of AI, robotics, and big data tools, factories are becoming more cost-efficient and releasing fewer emissions. In fact, energy efficiency and cost savings can go hand-in-hand; studies show that implementing a resilient strategy for sustainability can cut costs for manufacturers by nearly 60%. With greener factories, it will become more economical to have multiple production centers that are situated much closer to the end-user.
All of these tie in perfectly with the e-commerce desire to break into new markets, namely those populations in Asia that are experiencing wage growth and increased standards of living. Projections for economic growth in Latin America and Southeast Asia coupled with the desire to expand production in those regions mean there’s a big opportunity in the upcoming years.
Building a resilient, ecommerce-ready supply chain is no longer optional—it’s essential for survival.
Rethinking manufacturing post-Trump tariffs
This isn’t just a reaction to the latest tariff headline — it’s a structural shift. Two major factors are pushing brands to regionalize manufacturing for the long haul:
Pandemic scars: COVID lockdowns exposed how fragile hyper-globalized supply chains really were. Nobody wants to gamble on a single chokepoint again.
Permanent tariff uncertainty: Tariffs aren’t a blip anymore; they’re the new normal. Companies are building flexibility into their strategies to pivot when trade rules change — because they will.
Stay in step with changes in manufacturing
If your business is considering how to create a manufacturing strategy that’s resilient and adaptable, you need a partner that knows the industry inside and out.
At Wayfindr (formerly CBIP), we’re constantly following the latest trends in manufacturing. Using our broad network of global partners, we work with you to assess sourcing, manufacturing, and the shipping reliability that today’s consumers demand. We fit your needs based on your customer, business size, goals, and more to give you what matters: options.
Talk to one of our experts today to learn how Wayfindr can assure your supply chain sees long-term success.
About Author
Nick Bartlett
Co-founder & Director
Nick co-founded Wayfindr to help brands design and build market-leading carbon-neutral D2C logistics. As Director, he brings 15+ years of experience across logistics, marketing, supply chain and retail from Asia Pacific to the world.
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