The reelection of former President Donald Trump will reshape global manufacturing and supply chains, alongside lessons learned from recent disruptions including the pandemic, weather events, and labor action. While policies are yet to be finalized and implemented, trends from previous policy changes can provide clues to the future landscape.
Our research dives into global production and trade patterns, shedding light on how potential new tariffs might reshape the U.S. supply chains.
We offer five drivers for the future:
- Consumption will remain the primary source of logistics real estate growth. Evolving trade flows will naturally factor into the demand landscape in global gateway markets. However, most logistics real estate is located close to end consumers, with growth driven by the rise of e-commerce, supply chain modernization, and consumption patterns.
- Imports must grow as consumption expands. Imports into the U.S. have grown by 23% since 2019.i Offshore production must grow under a range of tariff scenarios, as many products remain prohibitively expensive to manufacture onshore.
- Trade links with Asia will remain important, preserving existing trade routes. China still anchors global manufacturing, but companies are diversifying into other Asian nations. This group has increased imports to the U.S. by 45%ii since 2019.
- Supply chain regionalization will continue, exemplified by the rise of Mexico’s production capabilities. Imports from Mexico grew 39%ii since 2019 and logistics real estate demand remains well above pre-pandemic levels. We expect further structural growth driven by near-shoring after a period of short-term uncertainty as the new U.S. administration renegotiates trade agreements.
- Onshoring and nearshoring will complement imports. Recent U.S. manufacturing investments are concentrated in green industries, semiconductors and healthcare—industries that have high value, but limited implication for containerized shipping. Consequently, we expect that onshoring will be a source of net growth for U.S. logistics real estate demand.
Key trend: Asian diversification
Tariffs have not reversed import growth, and supply chain diversification across Asia has considerable momentum. Asian countries, excluding China, are the fastest growing source of U.S. imports, up 45% since 2019ii while total U.S. imports grew 28% on a nominal basis, and 23% on an inflation adjusted basis.i Asia ex-China now accounts for 28% of U.S. imported goods.ii Producers in Asia ex-China have cost advantages, labor availability, and rapidly improving supplier and transportation ecosystems. This shift is not new: China+1 and relocations date back more than a decade, as producers sought new locations for low-cost manufacturing as Chinese producers moved up the value chain. Tariffs simply accelerated the shift. In some cases, manufacturing still occurs in China, with subsequent value-added activities, like assembly, occurring in other Asian geographies. Examples show strategic diversification across the region, such as Vietnam’s increased computer production, India’s growing smartphone manufacturing and Indonesia’s expansion in footwear and apparel. See our appendix for more detail.
China has retained dominance in a range of product categories. While production is shifting and imports from China to the U.S. have decreased, they are only down 4% since 2019.ii China remains the primary exporter to the U.S. across a range of goods, including smartphones, computers, clothing and appliances. These high proportions leave room for further change alongside the possible expansion of tariffs. Detail by product category, found in the appendix, reveals the categories shifting production to outside China (China+1) are predominantly low- and moderate-value added manufacturing products.
New production hubs face initial challenges, including limited skilled labor, underdeveloped supplier networks, and gaps in energy infrastructure and transportation links, making the shift gradual rather than immediate. Any move away from global sourcing solely optimized for cost and scale could translate to higher initial costs for businesses and consumers.
Chinese third-party logistics companies’ (3PLs) growth facilitates the movement of goods from Asia to the U.S. in an era of shifting trade policies. In 2024, Chinese 3PLs accounted for roughly 20% of U.S. net absorption,iii with expansion concentrated in key trade gateways. While these companies have long operated in the U.S., their rapid growth coincides with the growth of cross-border e-commerce. While many of their underlying customers are China-based retailers and manufacturers, they have been (and increasingly will be) facilitating imports from across Asia, not just China.
