EDCUtah recently tuned in to a webinar hosted by the Reshoring Institute, a non-profit dedicated to reshoring manufacturing back to the United States. The Institute interviewed 18 executives across a wide range of industries on recent changes to tariffs. The webinar covered a lot of ground, so this recap focuses on what corporate executives are doing to manage volatile situations.

Rosemary Coates, executive director of the Reshoring Institute, led the discussion. She started with an historical perspective on tariffs, then outlined the goals and aspects of the recent moves by the Trump administration. Some takeaways include:

• “We’re moving away from sole sourcing to give us more options.” According to Coates, this quote from one executive was a common theme throughout all the discussions they had in the study. Domestic sourcing is likely to grow over the next few years, Coates observes, though she cautions that redeveloping a domestic supply base can take as much as 18 months to put into effect. She notes that two-thirds of the respondents are seeking to increase domestic supply chains.

• “Our capital investments are frozen because we don’t know what to expect.” Uncertainties are causing companies to slow or stop major expenditures. Coates said that there is a similar chilling effect on hiring, at least until “outlooks and tariff rates are stabilized.” This finding was another point of consistency in all the conversations.

• Respondents indicated that, especially in the electronics sector, which imports components from China, uncertainty and geopolitics are causing disruptions. The elimination of de minimus shipments (value less than $800) is also creating an increased workload and delays for U.S. Customs.

• Companies would like to manufacture in the United States, but the economics are challenging. Investments in automation would be a significant part of this approach.

• “We are asking our Chinese suppliers to give us a discount – at least 50 percent of the tariffs.” At the same time, suppliers are asking U.S. clients to absorb more freight charges. In general, companies recognize they will have to increase prices to customers, and are asking suppliers to share the load. In addition, most companies are working with forwarders and brokers to review import classifications, potential duty drawbacks, and using foreign trade zones to delay or reduce costs.

• Companies can also look at U.S. Customs strategies, such as the First Sale Rule, to lower costs. For example, a Chinese manufacturer may sell to a Hong Kong trading company, which then sells to a U.S. importer at a marked-up price. The duty can then be calculated on the lower first sale price rather than the final U.S. sale price. There are provisions that must be followed to utilize this technique; companies are urged to work with their brokers to manage the details.

• Lastly, as of this writing, there are trade partners with lower tariffs to consider. Goods covered by the US-Mexico-Canada Agreement (USMCA) are duty-free. India, Indonesia, the Philippines, Taiwan, South Korea, Vietnam, Thailand and Malaysia have relatively low tariffs at this point.

Going forward? In Coates’ words, a number of the companies are “stuck, not knowing what to do.” Others are modeling various alternative strategies and “what-if” approaches, using cross-functional teams. This involves an analysis of geopolitical risks (particularly with China and Taiwan), as well as consideration of moving manufacturing to alternative low-cost countries such as Vietnam, India and Mexico. Coates also notes that companies can work with economic development partners to facilitate managing tariff changes and reshoring.

In Utah in particular, EDCUtah investors are encouraged to work with the Salt Lake City Department of Economic Development and the World Trade Center Utah on foreign trade zone matters, and with the Manufacturing Extension Partnership on supply chain development and manufacturing best practices. EDCUtah will continue to engage with companies looking to reshore or diversify operations, and with foreign companies looking to find a manufacturing “landing zone” in the United States.

You can view the entire presentation here. For more information on the Reshoring Institute, visit their website.

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Throughout the year, EDCUtah brought you Utah’s top economic development highlights as they’ve happened. From energy to life sciences to aerospace, a lot of progress took place in the last 12 months. As we close out 2024, here’s our list of news worth celebrating. ‍

Food Processing Projects Land and Expand in Utah

In 2024, three significant announcements in the food processing industry vertical took place. In January, Mars, Inc. announced a $237 million, 190-job expansion for Nature’s Bakery in Salt Lake City.

In March, Campbell Soup Company announced plans for a $160 million, 86-job expansion of its Pepperidge Farm facility in Richmond, Utah, to meet increased consumer demand for its Goldfish crackers.

In a December interview, Ya YA Foods president Yahya Abbas indicated that the company, which is partnering with Oatley in an Odgen, Utah facility, is ahead of projections for hiring. The site could reach 400 jobs vs. the original estimate of 302, announced in November 2023.

Geothermal Heats Up

A growing percentage of Utah’s energy comes from alternative sources, and that trend continues. In October, Fervo broke ground on power plant construction at Cape Station, an enhanced geothermal energy production project located northeast of Milford City, Utah. Cape Station is slated to produce 400 megawatts of power in the first two phases of the project, and Phase I will begin delivering around-the-clock power to the grid in 2026. Fervo anticipates that Cape Station, when complete, will employ up to 30 full-time permanent workers.

‍Life Sciences Sector Shows Healthy Growth

In July, Edwards Lifesciences – a global leader in medical innovations for structural heart disease and critical care monitoring – announced an expansion of its Utah operations, representing $34.8 million in investment and 560 new jobs over the next 15 years. Edwards Lifesciences has had several expansions in Utah in recent years, and is a significant employer in the Salt Lake Valley.

Information Technology Sector Sees New Investments

In February, Lehi-based e-commerce company Pattern revealed plans to bring more than 500 high-paying jobs and invest nearly $26 million in Utah over the next 10 years.

In October, data-intelligence company Strider announced plans to expand in South Jordan, Utah, and bring 152 new jobs over the next five years.

Energy Costs a Plus for Utah

A March “Research Minute” report issued by EDCUtah’s Research Team focused on a long-running advantage for corporate expansion in Utah, namely energy costs. According to federal data, Utah has the fourth lowest electricity costs in the nation for all sectors at 9.03 cents per kilowatt hour—behind North Dakota, Wyoming, and Louisiana. In states with higher costs, residents and businesses may pay double or even triple this amount. (California is at 24.73 cents per kilowatt hour.) In 2023, Utah also ranked fourth in the nation for cheapest natural gas costs in all sectors, behind Idaho, North Dakota, and South Dakota.  ‍

Northrop Grumman Continues Growth in Northern Utah

Aerospace and defense technology company Northrop Grumman announced in February further plans to expand its presence near Hill Air Force Base. “Project Unity II” will bring an additional 1,206 jobs, adding onto the 3,000 jobs announced in 2020 as part of “Project Unity.” ‍

Fueling Growth and Innovation

The end of the year finished strong when, in December, sustainable aviation fuel company CleanJoule, and Hypercraft, manufacturer of electric powertrain systems, both announced expansion plans. CleanJoule will bring 100 new jobs and $150 million in investment to Salt Lake City, and Hypercraft will bring 183 new jobs and $39 million in investment to the Wasatch Front. ‍

Consistent Process, Long-term Relationships

EDCUtah started and ended the year with more than 100 active projects, and as demonstrated by the recent ECONOMIX event held in Utah in December, our relationships in the national site selection community remain strong. We look forward to continued success in 2025, thanks to the support of our many public and private-sector investors.

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“Building Together” highlights examples of the collective impact of your investment and EDCUtah’s work in communities across the state. 

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