Tariffs, Geopolitics Reshape Corporate Site Selection

Companies are pausing major capacity commitments and prioritizing flexibility over cost optimization as tariffs and geopolitical pressure upend decades of supply chain assumptions. Didi Caldwell, president and CEO of Global Location Strategies, told Freightwaves this marks a structural departure from the low-cost location models that drove offshoring for the past 30 years.

“We’ve gone from modeling cost to modeling resilience,” Caldwell said. Firms now stress-test locations across multiple scenarios, choosing sites that remain feasible as tariff regimes, energy prices, and labor markets fluctuate. This recalibration is pushing companies toward reversible near-term decisions while deferring large, irreversible investments.

The New Location Calculus

Energy, labor, and logistics are now the three primary cost drivers for manufacturing. Caldwell noted that 40% of heavy industry costs are energy-related. Advances in AI and automation are making manufacturing more capital- and energy-intensive.

North America's energy advantage, stemming from the U.S. Shale revolution and its status as the world's largest net energy exporter, makes the reshoring math straightforward for many projects. Caldwell linked her career shift to this change. I spent the first half of my career moving companies outside of the United States, and I’ve spent the second half of my career moving them back in, she said.

Geopolitical and Border Risks

The Canadian border has emerged as a particular pressure point. We’ve spent 60 years or so treating the Canadian border as if it were more or less like a state border, and now all of a sudden it is a place where there’s real risk associated with that, Caldwell explained. This new risk assessment is a key factor in the broader trend of favoring flexibility.

Deal flow reflects this shift. While billion-dollar-plus announcements continue, much active project work is now in the mid-market tier-supplier and support facilities responding to previously announced mega-projects.

The NIMBY Obstacle

Community opposition, or NIMBYism, is stalling major industrial projects needed for reshoring. Caldwell cited a multibillion-dollar aluminum smelter project her firm sited in northeastern Oklahoma roughly a year ago. It is now under a community moratorium extended to April of next year. The project was expected to employ thousands and reduce U.S. Dependence on imported primary aluminum.

She advised economic developers to engage communities before projects arrive, securing buy-in for industrial land use designations and infrastructure plans well ahead of any announcement. Site selectors are increasingly disclosing company identities earlier to build community support, a shift from standard confidentiality practice.

Emerging Destinations Beyond North America

For companies looking beyond the region, Caldwell pointed to Colombia and Argentina as emerging destinations. Colombia offers favorable U.S. Trade agreements, existing industrial infrastructure, and faster project approvals. It is already attracting manufacturers bypassing Mexico due to labor availability constraints there.

Argentina, despite decades of political instability, offers natural resources and a highly educated population. Caldwell said its current government has a more capital-friendly regulatory direction, factors that could make it “the surprise entry into this economic development competition” over the next 20 years.