Friendshoring: the alliance risk buyers overlook

Seventy-three percent of companies expect friendshoring to account for a rising share of their sourcing and production within three years, according to Capgemini data summarized by ISCN. The logic is appealing: move sourcing to politically aligned nations, reduce geopolitical exposure, and build supply chains around trust rather than just cost. The problem is that alliances shift. Tariffs arrive on allies. And procurement teams that bet on friendship as a permanent structural condition are building supply chains on a political variable they cannot control.

Mexico won the nearshoring shift. That does not make it permanent.

Mexico surpassed China as the largest source of US goods imports in 2023. By 2024, total US-Mexico goods trade reached approximately $840 billion, with US imports from Mexico up nearly 7% year over year, according to trade data analyzed by Tradlinx. Mexico attracted $110 billion in FDI announcements in 2023 and another $45 billion in the first half of 2024 alone. Manufacturing exports rose from roughly $320 billion pre-COVID to $665 billion by 2025, driven heavily by automotive supply chains, which represent nearly 50% of all manufacturing foreign direct investment.

The Kearney Reshoring Index confirms the structural shift: US imports from 14 Asian low-cost countries and regions fell from $1.022 trillion in 2022 to $878 billion in 2023 — a $143 billion drop. Imports from China alone fell 20%, or $105 billion. Nearshored and reshored production in North America is "taking market share away from Asian manufacturers," Kearney concluded in its 2024 report, calling it "a decisive shift in strategic business operations."

The data that should worry procurement teams

A 2025 academic study covering three major production hubs — Factory America, Factory Asia, and Factory Europe — examined four types of shoring strategies simultaneously using trade data from 2015 through 2024. The finding that should concern every procurement team with a friendshoring mandate: "the fragility of 'friendship' in friend-shoring arrangements has become more apparent," the researchers wrote in the Journal of International Economics. US tariffs imposed on Canadian and Mexican imports under the new administration demonstrated that political alignment offers no permanent protection against trade policy shifts.

Nearly 79% of manufacturers are adopting regionalized supply chains for enhanced flexibility, according to Polaris Market Research's 2026 resilience analysis. That is rational given the current tariff environment. What is less rational is treating regionalization as a finished strategy rather than a current-state adjustment. Supply chains built around today's allies can become tomorrow's tariff targets before procurement teams have time to re-diversify.

The IMF warning: friendshoring has real economic costs

International Monetary Fund research on de-risking strategies quantifies the trade-off. Large-scale reshoring and friendshoring can impose significant welfare losses when political blocs over-concentrate production in allied nations and duplicate manufacturing capacity. The IMF working paper on the price of de-risking models scenarios where both China and OECD members reshore and friend-shore simultaneously. The result is fragmentation that reduces efficiency without eliminating geopolitical exposure — because the exposure simply shifts to a smaller set of countries.

This is the procurement paradox of 2026: moving from a single low-cost dependency to a small set of allied dependencies still leaves concentration risk. It trades supplier country risk for political relationship risk. The mechanism changes, but the vulnerability persists. PwC's 2025 outlook for industrial products captures the stakes: 90% of leaders believe companies still relying on distant suppliers in 2030 "will be extinct by 2035." The implication is not that friendshoring is wrong. It is that procurement teams need more than one "friendly" source.

What good looks like: sourcing portfolios, not alliance bets

Capgemini data shows friendshoring's expected share of sourcing rising from 37% to 41% within three years. That is growth, but it also means 59% of sourcing will still come from non-friendshored channels. The best procurement strategies treat friendshoring as one element of a diversified sourcing portfolio — not as a decisive shift away from global sourcing.

Diversification via regionalization in 2026 is accelerating, with 43% of supply chains having implemented notable geographic changes in 2025 to mitigate tariff impacts, according to QIMA Sourcing Survey data. But the retailers and manufacturers leading this shift — adopting multi-hub strategies across Mexico, Southeast Asia, and South Asia — are maintaining options across multiple regions, not concentrating in one allied bloc. That is the structural difference between a sourcing portfolio and an alliance bet.

What this means in practice

Maintain at least two regional sourcing options for critical categories. A single friendshored supplier in a politically aligned country is still a single point of failure. The political relationship can change faster than the supplier contract.

Separate the geographic and political dimensions of sourcing decisions. Nearshoring to Mexico makes operational sense: 2-5 day overland transit versus multi-week ocean freight from Asia. Friendshoring to a distant ally with the same lead time as the displaced Asian supplier adds political risk without the operational benefit.

Build tariff scenario models that include allies. Most procurement tariff models assume a stable set of partners and a narrow set of adversaries. The data from 2025-2026 shows that assumption fails regularly. Model scenarios where current allies become tariff targets, and test whether your supply base can absorb the shift.

Track political alignment as a supplier risk variable. Just as procurement teams monitor supplier financial health and operational performance, they should monitor the political relationship between their home country and each key sourcing country. UN voting alignment, trade dispute filings, and tariff actions are leading indicators that a friendshoring relationship is deteriorating before the contract is affected.