U.S. tariff rates have jumped from an average of 2.5% to nearly 27% in early 2025, the highest levels seen since 1943, affecting everything from semiconductors and electric vehicles to steel and household appliances. The sheer volume of affected products is pushing companies to explore localized sourcing strategies, putting nearshoring back in the spotlight as a promising solution.
However, for many teams, the promise of nearshoring is harder to realize than it seems. Outdated supplier data, limited visibility and unclear risk profiles make quick pivots difficult. The business case for nearshoring might be growing stronger, but the operational reality is still falling short. Without a clear view of supplier capacity and reliability, even well-intentioned shifts can backfire.
Nearshoring Isn’t Just About Location, It’s About Strategy
There’s a common misconception that moving suppliers closer to home automatically reduces risk. But geographic proximity is only part of the equation. Many companies are learning the hard way that being nearby doesn’t make a supplier more reliable, compliant, or capable of scaling or supporting long-term needs.
That risk is often caused by poor supplier data and discovery practices. Supplier.io’s data shows that 36% of procurement teams still rely on basic internet searches to identify new suppliers, an approach that rarely surfaces partners who have the industry experience to meet a company’s quality standards.
The core problem isn’t geography; it’s visibility. McKinsey reports that 40% of organizations lack comprehensive visibility into their Tier 1 suppliers. Without better data, shifting sourcing closer to home could end up recreating the same vulnerabilities in a different region.
Nearshoring, when done well, is not a relocation effort. It’s an intelligence effort. Successful teams are moving beyond location-based decisions and instead focusing on what makes a supplier truly viable: performance history, operational transparency, compliance certifications and the ability to scale.
Visibility Gaps Undermine Agility
Tariffs, geopolitical shifts and environmental disruptions don’t hit in isolation; they ripple through multiple tiers of the supplier ecosystem. The good news is that leaders are starting to close that gap, realizing they need to look beyond their usual supplier pools.
Small and local suppliers often offer greater flexibility and cost savings, but they’re frequently overlooked because they don’t appear in legacy systems or top search results. Tapping into this segment requires intentional discovery, real-time intelligence and a more inclusive approach to evaluating supplier viability.
A Five-Step Approach to Smarter Nearshoring
Bringing suppliers closer won’t reduce risk if the underlying data is incomplete. Many procurement teams still rely on outdated supplier lists and fragmented systems, making it difficult to act quickly or with confidence. These gaps lead to delays, missed opportunities and increased exposure.
This five-step roadmap outlines how procurement leaders can make nearshoring decisions that are faster, smarter and built to last.
Step 1: Build a pre-vetted bench of regional suppliers
Start discovery before the need arises. Review and vet your existing suppliers based on the certifications they hold, their sustainability and compliance track record, financial strength and ability to scale. A ready-to-go bench enables faster pivots without sacrificing quality or reliability.
Step 2: Map supplier density
Analyze the market to identify where there are small and local suppliers that might meet your growing needs. According to the Small Business Administration, there are over 34 million small businesses in the U.S. You’ll be surprised how many may be right next door.
Step 3: Use supplier intelligence to inform planning across teams
Treat supplier discovery as a cross-functional priority. Integrate it into finance, operations and risk management workflows. This ensures sourcing decisions are aligned with broader business strategy, and that your team can move fast when conditions change.
Step 4: Prioritize adaptability, not just availability
Choose suppliers who’ve demonstrated industry experience and longevity. These are the suppliers who’ve successfully scaled up during demand spikes, pivoted product lines or navigated regulatory change. Nearshoring only works when the suppliers you bring closer are capable of delivering. Discovery isn’t a search; it’s a strategy.
Step 5: Don’t overlook the small suppliers in your backyard
Some of the strongest nearshoring partners aren’t global brands; they’re high-performing small businesses hiding in plain sight. These suppliers often meet or exceed standards for quality, compliance and agility, but go undiscovered due to outdated data or narrow search practices. Cast a wide net and invest in tools that surface credible small and local partners before the need becomes urgent.
Make Nearshoring a Strategic Advantage
Done well, nearshoring can reduce risk, improve agility and strengthen supplier relationships. Done hastily, it can expose new blind spots and recreate old vulnerabilities, just in a different zip code. The difference comes down to intelligence. Visibility across tiers. Trusted supplier data. A clear view of who’s capable, not just who’s close.
For procurement leaders, this isn’t just about reacting to today’s tariffs or trade shifts. It’s about building a sourcing strategy that can withstand whatever comes next. That means working across functions, investing in discovery and treating nearshoring as an ongoing discipline, not a one-time fix.
If you’re going to bring your supply chain closer to home, make sure it’s stronger too.
