Reshoring and FDI Definitions
The Reshoring Initiative classifies every case as either Reshoring or Foreign Direct Investment (FDI) using consistent definitions and review criteria.
Foreign Direct Investment (FDI) Definition
FDI includes new or expanded U.S. manufacturing by companies whose global headquarters are located outside the United States.
In most cases, classification is straightforward. Companies with names that include terms such as "U.S.," "USA," "North America," or "Americas" are often subsidiaries of foreign corporations. When ownership is uncertain, we verify where the company's global headquarters was located at the time of the announcement.
Ownership can become more complex when historically U.S. companies have been acquired by foreign firms, such as Chrysler or GE Appliances. In these cases, announcements are classified according to the company's ownership at the time of the announcement, regardless of where the company originated.
For joint ventures involving both U.S. and foreign companies, such as partnerships between U.S. automakers and Panasonic to manufacture EV batteries, the announced jobs and investment are allocated proportionally between Reshoring and FDI based on the ownership structure of the venture.
Reshoring Definition
Reshoring includes new or expanded U.S. manufacturing by companies whose global headquarters are located in the United States. Unlike FDI, identifying reshoring often requires evaluating the intent and market impact of an announcement rather than simply determining company ownership.
To qualify as reshoring, a case must involve a U.S.-headquartered company and meet one of the following criteria:
- Direct Reshoring: The company explicitly states that it is localizing production or supply chains to the United States.
- Import Substitution Reshoring: The project increases U.S. production in an industry with historically high import dependence (80% or greater), where the new domestic production will replace imported goods.
- Critical Products: The company's products have been identified by the U.S. government as essential products to be reshored.
For direct reshoring cases, the company does not need to use the term reshoring, nor is the closure of an offshore facility required. Instead, we look for statements indicating that production or sourcing is being localized in the United States. Common indicators include:
- Expanding production to support Made in USA products.
- Increasing domestic capacity because existing U.S. production is insufficient to meet demand.
- Bringing production closer to customers.
- Improving supply chain resilience or reducing geopolitical risk.
Import substitution reshoring recognizes that some industries are so heavily dependent on imports that new U.S. production can reasonably be assumed to replace imported goods, even when a company does not explicitly state that production is returning from overseas. These are industries where imports supply 80% or more of U.S. demand, such as apparel and footwear.
Critical products come from strategically important industries identified by the U.S. government, including semiconductors, pharmaceuticals, rare earth materials, EV batteries, steel, and aluminum. For these industries, the 80% import-dependence threshold is not required. The government has determined that expanding domestic production directly strengthens supply chain resilience in critical areas.
A complete list of qualifying product categories is available upon request.
10-02-26
