Written by: Shannon Khaira Faransyah, Safira Fachri, Ruby Zahralia, Gherrid Arafat
Designed by: Martha Candra Mowoka
In recent years, global supply chains have undergone one of the most significant transformations in modern business history. A growing number of multinational companies are shifting manufacturing operations away from China, a trend driven by geopolitical tensions, rising tariffs, and the need for more resilient and diversified supply chains. This strategic shift, widely known as nearshoring, is reshaping the global production landscape and redefining how companies manage risk in an increasingly uncertain world. For years, China has been the center of global manufacturing. Its strong supply chains, massive workforce, and efficient factories turned it into the world’s go-to production base, especially for technology companies. But that dominance is beginning to shift. A growing number of multinational firms are now moving parts of their manufacturing elsewhere.
The biggest drivers behind this trend are the rising tariffs imposed by the United States and the broader geopolitical tension between the world’s two largest economies, making manufacturing in China for export to Western markets notably more expensive. Furthermore, companies are increasingly wary of the operational risks associated with geopolitical friction, including sanctions and export controls. Concurrently, the once-insurmountable cost advantage of manufacturing in China has been eroding due to rising labor costs and stricter environmental regulations. This creates a powerful “push and pull” effect: companies are pushed away from China by rising costs and uncertainty, while simultaneously pulled toward nearshoring destinations by the promise of stability, preferential trade agreements, and a shrinking cost gap.
The other initial driver of this shift was a fundamental rethinking of supply chain risk. The COVID-19 pandemic exposed the profound vulnerabilities of the hyper-efficient “just-in-time” model. When factories in one region shut down, the ripple effects halted production across the globe. This experience forged a new consensus: efficiency must be balanced with resilience. Nearshoring emerged as a core “just-in-case” strategy, shortening complex supply chains and reducing dependency on any single geographic location. By bringing production closer to home, companies gain greater visibility and control, allowing them to respond more swiftly to disruptions, whether from pandemics, natural disasters, or political instability.
This strategic reallocation is creating clear winners in the global manufacturing landscape. For North America, Mexico has become the quintessential nearshoring hub. Its proximity allows for rapid trucking across the border, turning supply chains that once took weeks by sea into journeys of days. The United States-Mexico-Canada Agreement (USMCA) provides a stable trade framework, and Mexico’s established industrial clusters, particularly in automotive and aerospace, offer a ready-made ecosystem of suppliers. Similarly, in Europe, countries in Eastern Europe like Poland, the Czech Republic, and Romania are attracting significant investment. They offer a combination of skilled yet cost-competitive labor, seamless access to the EU single market, and political stability, making them an attractive alternative for German and French companies seeking to reduce their reliance on Asian supply chains.
Logitech is one of the clearest examples of this shift. Rather than relying solely on China, the Swiss-American company now spreads its production across Malaysia, Vietnam, Thailand, Mexico, and Taiwan. The goal isn’t to sever ties with China, but to avoid the heavy tariff burden on products like mice and keyboards. Logitech’s CEO, Hanneke Faber, has been open about the rationale. Relocating production helps shield the company from tariff risks, and according to her, it doesn’t drastically raise operational expenses. To help absorb tariff-related costs, Logitech even raised U.S. retail prices by around 10%. It’s a practical example of how companies adjust quickly to protect margins.
Apple is also another major player reshaping the global manufacturing landscape, though on a much larger scale. The company has steadily expanded its production in India, a move driven by both tariff concerns and a desire to diversify away from overreliance on China. Several iPhone 16 Pro models are now being assembled in India, and Apple reportedly aims to produce as much as 25% of all iPhones there in the coming years. The shift is already reshaping global trade flows. According to Canalys, India surpassed China as the largest smartphone exporter to the U.S. in Q2 2025, capturing 44% of the market, while China slid to 25%. For Apple, the move isn’t just defensive, it’s strategic. India offers government incentives, growing manufacturing capacity, and a market that Apple wants deeper access to. As tensions between Washington and Beijing continue, India has emerged as one of the biggest beneficiaries.
Despite the powerful momentum, the transition to a nearshoring model is not without its challenges. A sudden influx of manufacturing can strain the infrastructure of host countries, testing their power grids, water systems, and transportation networks. Furthermore, many companies are not abandoning China entirely but are adopting a “China Plus One” strategy, maintaining their existing base for the vast domestic Chinese market while building new capacity elsewhere for other markets. This nuanced approach complicates a full-scale exodus. Finally, a critical challenge lies in talent and supplier ecosystems; while labor may be cheaper, finding the specific technical skills and the dense network of reliable sub-suppliers that exist in mature Asian hubs can be a slow and complex process.
The rise of nearshoring does not signal the end of globalization, but rather its evolution into a new phase often termed regionalization. Companies are building more self-sufficient supply ecosystems within the Americas, Europe, and Asia-Pacific. This model aims to capture the benefits of scale within regions while insulating them from global shocks. In conclusion, nearshoring is far more than a fleeting buzzword. It is a strategic and lasting response to a more volatile world, representing a fundamental recalibration of how companies balance cost, risk, and responsibility. The global map of production is being decisively redrawn, with geographic proximity emerging as a critical component of corporate strategy for the decades to come.
References:
Digivestasi. (2025, August 08). Ramai-ramai Tinggalkan China, Investor & Pabrik Beralih ke Negara Tetangga RI. Digivestasi. Retrieved December 5, 2025, from https://www.digivestasi.com/news/detail/investasidigital/ramai-ramai-tinggalkan-china-investor-pabrik-beralih-ke-negara-tetangga-ri
CNBC Indonesia. (2025, April 28). Pabrik iPhone Pindah ke Negara Tetangga, China Mulai Ditinggalkan. CNBC Indonesia. Retrieved December 5, 2025, from https://www.cnbcindonesia.com/tech/20250428080917-37-629178/pabrik-iphone-pindah-ke-negara-tetangga-china-mulai-ditinggalkan
TTEC. (n.d.). What is Nearshoring? Definition and Benefits. TTEC. Retrieved December 5, 2025, from https://www.ttec.com/glossary/what-is-nearshoring-definition-and-benefits
