How Foreign Manufacturers Are Deepening American Roots Amid Tariffs

Tariffs have forced a reckoning for global manufacturers. 

When import duties hit double digits, the math on international shipping stops working. Foreign companies that spent decades building supply chains across Asia, Europe and Latin America now face a simple choice: absorb the tariffs and watch margins evaporate, raise prices and lose market share, or establish factories in the markets they’re trying to serve. 

For executives weighing whether to follow suit, the decision goes far beyond tariff math. Here’s what global manufacturing leaders need to know. 

Foreign Investment as a Tariff Response Strategy

In response to these tariffs, countless international companies are designing plans aimed at establishing or expanding their U.S. operations, viewing direct investment as a strategic necessity. 

Automotive Industry at the Forefront

The automotive sector, particularly affected by the new tariffs, shows this trend most clearly. 

Honda has decided to move production of its next-generation Civic hybrid from Mexico to Indiana in direct response to potential tariff impacts on one of its bestselling models. 

Hyundai Motor Group also announced a $21 billion investment in U.S. operations, including a $5.8 billion steel plant in Louisiana capable of producing over 2.7 million metric tons of steel annually. This investment precedes the auto tariff announcement, which goes to show how companies are positioning themselves to avoid potential trade barriers. 

This move into steel production isn’t happening in isolation either. The steel industry itself is being remade due to tariffs. Nippon Steel’s $14.9 billion acquisition of U.S. Steel was finalized on June 18, 2025, after an 18-month saga of political opposition and national security reviews. President Biden initially blocked the deal on January 3, 2025, citing national security concerns, prompting Nippon Steel and U.S. Steel to sue the administration. However, President Trump ordered a new CFIUS review in April and ultimately allowed the deal to proceed with unprecedented conditions. Under the final agreement, Nippon Steel owns 100% of U.S. Steel but the U.S. government holds a “golden share” giving it veto power over plant closures, production cuts, or layoffs. Nippon Steel committed to $11 billion in new investments by 2028, U.S. Steel keeps its Pittsburgh headquarters with an American CEO and majority U.S. board, and the government maintains extensive oversight through a national security agreement. Meanwhile, overseas producers like Tata Steel UK and British Steel are losing orders and American customers. For steel-heavy industries from cars to construction, these changes force hard choices—pay more for domestic steel or move production overseas. 

Other Sectors Make Similar Moves

Beyond automotive, other industries are making comparable investments, both to minimize tariff exposure and capitalize on the U.S. market. 

Iberdrola, the Spanish energy company, plans to invest more than $20 billion in U.S. grid infrastructure by 2030, with potential increases through generation projects. With $50 billion in existing U.S. assets across 24 states, Iberdrola shows how European utilities are increasing their American presence. 

The European investment surge reflects a broader strategic calculation, however. Mickey Matthews, Managing Director and Global Chair of the Governance Committee at Stanton Chase, observes: “The U.S.-EU tariff arrangement reflects a calculated trade-off by all parties in these rapidly changing and complex times: Europe absorbs higher duties on key exports in exchange for stability in the broader transatlantic relationship, underscoring how economic policy and security commitments are now tightly interlinked. Specifically across the automotive sector, agriculture, steel, and technology, the new U.S. tariffs illustrate how sectoral pressures vary, but together they underscore a broader reality: transatlantic trade is now as much about managing strategic interdependence as it is about market access.” 

Schneider Electric has also committed over $700 million to U.S. operations in the next two years, focusing on energy infrastructure that will support AI growth and domestic manufacturing. Similarly, Airbus operates a major assembly line in Mobile, Alabama, where it produces A320 and A220 aircraft primarily for U.S. customers. The facility delivered its 500th aircraft in 2024 and is now expanding with a second assembly line, creating 1,000 new jobs for the Gulf Coast. This expansion reflects Airbus’ strategy to increase U.S. production and shield itself from potential tariff impacts. As the largest export customer of the U.S. aerospace industry, Airbus spends $15 billion annually with American suppliers. 

For companies with existing U.S. operations, expanding their manufacturing footprint offers some serious advantages. Johnson & Johnson is investing over $55 billion over the next four years to establish manufacturing facilities and research infrastructure in the United States. Eli Lilly also plans to spend at least $27 billion to build four new manufacturing plants in the U.S. over the next five years. And Pfizer indicated it might move production from overseas facilities to existing U.S. plants if necessary to reduce tariff impacts. 

The trend extends beyond established players to companies newly exploring U.S. production. Taiwan’s Compal Electronics, a major contract laptop maker, has spoken with several southern states about potential investments. Texas ranks as a leading candidate for Compal. Inventec, which makes AI servers using Nvidia chips, is also evaluating U.S. locations. The company prefers Texas due to its proximity to Mexico and power infrastructure. Even luxury goods maker LVMH is planning to bulk up its production in the United States. 

Some industries will move faster than others toward U.S. production. Electronics, advanced manufacturing, and pharmaceuticals have the money to fund new facilities. They also face big tariff risks that make the investment worthwhile. Taiwanese semiconductor manufacturers feel especially vulnerable and will likely keep expanding U.S. operations. 

Other sectors will struggle with the economics. Apparel and basic consumer goods rely on low labor costs to maintain profits. For these companies, the higher wages in the U.S. may exceed any tariff savings. Many will choose to pay the tariffs or move production to countries with lower labor costs that aren’t facing the same trade barriers. 

Four Ways to Hedge Your Manufacturing Bets Against Tariff Changes

Plan for Multiple Tariff Scenarios

Building a billion-dollar facility based on today’s tariff rates is risky when federal courts have already ruled some tariffs illegal, though they remain in effect during appeals. Design your facilities to handle different futures. If you’re building a factory to serve the U.S. market and avoid tariffs, ensure it can also export competitively if those tariffs disappear. Calculate break-even points at various tariff levels. Know exactly what tariff rate makes your U.S. facility unprofitable compared to importing. This clarity helps you decide whether to proceed, wait, or structure investments differently. 

Time Your Manufacturing Transition Strategically

Moving everything at once exposes you to maximum risk if policies change. Instead, transition your highest-margin products first where tariff savings matter most. Test your U.S. operations with these products before expanding. If you manufacture ten product lines facing 25% tariffs, start by moving the two that generate 40% of your profits. Learn from that experience before moving the rest. States competing for your investment offer better packages to early movers, but construction mistakes from rushing cost more than any incentive package saves.  

Localize Your Supply Chain in Stages

Moving final assembly to America while importing all components defeats the purpose when component tariffs can equal or exceed finished goods duties. Before breaking ground, identify which of your current suppliers will establish U.S. operations alongside you. For those that won’t, start qualifying American alternatives now. This takes longer than most companies expect. Quality testing, price negotiations, and reliability verification for new suppliers typically requires months. Begin this process before you need it. Companies succeeding at localization bring their critical suppliers with them or invest in developing American suppliers capable of meeting their specifications. 

Build Political Insurance

Manufacturing investments span multiple presidential terms and shifts in congressional control. Protect your investment by creating stakeholders across the political spectrum. This means more than just creating jobs. Become integral to your communities through workforce development programs with local colleges, supplier contracts with area businesses, and support for regional infrastructure improvements. When your facility employs 2,000 people, sources from 50 local suppliers, and anchors the regional economy, it has broad community support that transcends political changes. Geographic diversification across states with different political leanings provides additional protection too.  

What Happens Next for U.S. Manufacturing?

Volatility has become the baseline, not the exception. Companies that treat current disruptions as temporary miss the larger reality: global manufacturing now operates in permanent flux. The companies making billion-dollar bets on U.S. production are wagering that tariffs will persist regardless of political changes.  

For companies facing these difficult decisions, having the right leadership becomes vital. Stanton Chase helps manufacturers find executives who understand both American operations and parent company expectations through executive search, executive assessment, and succession planning. As this industrial realignment unfolds, having the right leaders may determine which billion-dollar bets succeed. 

The winners won’t just be those with the deepest pockets, but those whose leadership teams can read market signals quickly, change course when needed, and execute flawlessly despite uncertainty. For manufacturing executives who’ve spent decades perfecting global supply chains, this forced reinvention may be the ultimate test of their careers. 

About the Authors

Mickey Matthews is a Managing Director in the USA and Global Chair of our Governance Committee. His experience spans the industrial, professional services, and consumer products sectors, where he has worked cross-functionally with global clients. Throughout his career, Mickey has executed numerous senior management assignments in general management, business development, operations, and finance for clients including ADM, Aramark, Axalta, Tyco, Deloitte Touche, Kohler, and DuPont. He received his B.A. degree in business and economics from Brown University and graduated from the Fellows Executive MBA program at Loyola College, Maryland. 

Gilles Gaudefroy is a Partner at Stanton Chase Lyon and Paris, specializing in our industrial and supply chain practice areas. Before joining Stanton Chase, Gilles spent seven years with international executive search firms as a Senior Consultant and Managing Partner. His background includes experience in private equity and finance positions throughout the manufacturing and chemicals industries. Gilles has served as Managing Director and CEO in the chemicals and B2B distribution sectors, with positions based in both France and the USA. He holds a master’s in business administration from ESSEC Paris and is fluent in French and English.