These Trends Could Impact Manufacturing in 2025These Trends Could Impact Manufacturing in 2025

Nearshoring and reshoring of manufacturing operations seemed to accelerate during the COVID-19 pandemic as companies sought to shorten supply chains. Could reshoring get another push by the return of Donald Trump with his promises as the next US president to bring manufacturing back to the United States?

To find out what manufacturing developments could unfold in 2025, we asked Luis Gomez, group president at The Partner Companies (TPC), to share his insights. TPC is a global network of specialty manufacturers that serve OEMs in the aerospace, defense, clean energy, medical, and technology industries. The network encompasses 10 manufacturers in the United States, China, Wales, and Mexico: E-Fab, Elcon, Fotofab, Lattice Materials, LT Precision, Microphoto, Optiforms, PEI, Pinnacle Precision, and UPG. Together these manufacturers offer photochemical etching, ceramic metallization, crystal growth and electroforming along with core manufacturing capabilities such as injection molding, machining, metal fabrication and finishing. 

We have seen trends toward manufacturing reshoring and nearshoring since the pandemic. What happened in 2024?

Gomez: The execution of reshoring to the U.S. has been slower than expected. Instead, we have seen more de-risking out of China and into Mexico, with some movement to Southeast Asia and India. As customers continue to have high expectations for low costs, in 2024 we’ve seen the shift has been more toward nearshoring to Mexico rather than full reshoring to the U.S. This has been the case here at The Partner Companies (TPC), as we opened a production facility in Tijuana, Mexico, in late 2023 and have continued to see growth at that facility throughout this year with a focus on serving the aerospace and defense sectors. 

How will the new US president impact the US manufacturing industry? 

Gomez: No one knows for certain, but what I can say is that we’ll be ready as a business to adapt and remain flexible based on our unique business model as a part of The Partner Companies. From my perspective, the market has already speculated some of what they see that impact will be for manufacturers, and it has already been priced into the market from a material cost and other costing factors.  From a onshoring and nearshoring perspective, as I mentioned above, this trend has already started and is expected to continue. The reality is that this move wasn’t completely driven by tariffs in the last two or three years, but most of that has been because of fear of supply chain disruptions due to the pandemic, increasing transportation costs, and increasing labor costs outside of the U.S. We think that this trend of onshoring will continue, but that it will be due to supply chain risks versus tariffs.

What can manufacturers expect in markets such as aerospace, defense, clean energy, medical, and technology? What markets will be booming under the new president?

Gomez: We expect growth across most of these markets, except for clean energy, which may stay flat or see a slight dip due to potential changes in subsidies. The energy industry, including traditional oil, gas, and electric power generation distribution, is expected to grow significantly due to the increasing electrification of the U.S. that shows no signs of stopping. From a company standpoint, we are bullish on the medical device industry heading into 2025. 

There is talk of increased tariffs. What can OEMs expect and what strategies should they develop to minimize impact?

Gomez: The impact of tariffs is uncertain, but significant increases are unlikely in our perspective. Any material changes to tariffs would have a huge impact on the economies of both the U.S. and China, leading to increased costs and supply chain disruptions. The new administration will likely use tariffs as negotiating leverage rather than implementing drastic increases. There may be an opportunity to place more focus on intellectual property protection and currency manipulation. With that said, we’ve seen that much of the potential impact has already been priced into the market. 

From a onshoring and nearshoring perspective, as I mentioned above, this trend has already started and is expected to continue. The reality is that this move wasn’t completely driven by tariffs in the last two or three years, but most of that has been because of fear of supply chain disruptions due to the pandemic, increasing transportation costs, and increasing labor costs outside of the U.S. We think that this trend of onshoring will continue, but that it will be due to supply chain risks versus tariffs.  

How can rapid prototyping technologies and other advanced manufacturing methods help manufacturers?

Gomez: Rapid prototyping, which requires very close collaboration with customers, is becoming increasingly important as expectations for faster product development and introduction continue to rise. Our company has a team of 30 engineers focused on prototyping, design for manufacturing, and new product introduction. This allows us to work closely with customers to develop new products, improve efficiency, and reduce costs in real-time. Rapid prototyping is becoming expected of manufacturers, and TPC has placed a large emphasis on growing and maturing this function with strategic investments, like in the latest digital imaging technology to support photochemical etching processes.  

There is a lot of talk of digitalization and AI transforming manufacturing. What steps should OEMs take?

Gomez: At TPC, we use automation as a complement to our operations, rather than as a replacement for labor. The winners in this space will be those who can effectively integrate AI and automation to enhance their processes, not simply replace human workers. 

We are also seeing that this demand for AI and digitization is driving need for manufacturing of components to support these industries. We have certainly seen an increase in demand for components from our customers in the semiconductor manufacturing industry that are creating chips and other necessary elements to support the growth in AI adoption and implementation across industries. 

There is also a lot of talk about manufacturing labor shortages. What can OEMs expect and how can they navigate any challenges in 2025?

Gomez: Labor shortages and the associated cost increases are a major unknown. The new administration will need to strike a balance between immigration policies and controlling inflation. As a company, we focus on retaining our skilled workforce by cultivating a positive working culture and fair compensation, while also complementing labor with automation where appropriate. The reality is that the labor force will move to the markets that offer the best pay and opportunities. 

What advice do you have for engineers working for OEMs?

Gomez: My advice for engineers working for OEMs is to learn the entire business, not just their technical specialty. Understanding production, finance, and customer interaction is crucial. The most valuable engineers are those who can effectively communicate with customers and collaborate to improve products and processes.