A number of overseas companies, including a growing number in Brazil and elsewhere in Latin America, are actively exploring opening their first US distribution operation. It’s worth taking a factual look at what’s driving that interest, and what it means operationally for companies making the move.
Tariffs and trade dynamics are a real factor
Tariff policy has been a significant point of discussion in US trade over the past several years, and shifts in tariff structures affect the cost calculus for companies exporting into the US market. For some companies, establishing a US-based operation, rather than exporting finished goods from overseas, can change how tariffs apply to their business. This is a genuinely complex and evolving area, and companies evaluating it should work with trade and customs specialists rather than rely on general commentary, including this article, to make specific decisions.
Broader supply chain resilience trends
Beyond tariffs specifically, many companies have spent the past several years reassessing how much of their supply chain sits in any single country or region, following disruptions that made long, single-source supply chains feel riskier than they once did. Establishing US-based operations is one way some companies are diversifying that exposure, positioning inventory and production closer to the US customers they serve.
What this means operationally
Whatever the underlying reason, a company that decides to open its first US operation is taking on a real operational undertaking, one that involves labor law, hiring, facility buildout, systems, and logistics, all at once, often for the first time. The trend toward US-based operations may be driven by trade policy and supply chain strategy, but succeeding at it depends on the same operational fundamentals covered elsewhere in this series: realistic timelines, the right workforce structure, and a clear-eyed view of what’s actually involved in standing up a US facility.
FHI works with companies making this move, from the first planning conversation through a fully running US operation.
Frequently Asked Questions
Q: Why are international companies shifting to US-based operations instead of exporting?
A: The shift is primarily driven by two factors: changing trade dynamics and supply chain security. Recent shifts in US tariff structures have altered the cost calculus for foreign exporters. By establishing a physical footprint within the US, some companies can change how tariffs apply to their goods. Additionally, widespread global disruptions have exposed the vulnerabilities of long, single-source supply chains, prompting companies to position inventory and operations closer to their end consumers.
Q: How do tariffs affect the decision to open a US distribution facility?
A: Tariff policies can significantly impact the final cost of imported, finished goods. When a company establishes a US-based operation (such as assembling or distributing locally), it may alter the customs and duties framework applicable to its business model. However, because trade policies are highly complex and constantly evolving, companies should consult with trade and customs specialists to analyze their specific situation.
Q: What does “supply chain resilience” mean in the context of US expansion?
A: Supply chain resilience refers to a company’s ability to withstand and quickly recover from global logistics disruptions. After experiencing severe delays and bottlenecks in recent years, many companies are diversifying their geographic exposure. Moving operations or critical inventory storage to the US reduces reliance on cross-border logistics and ensures a more stable, predictable supply for US customers.
Q: What are the primary operational challenges when opening a first US facility?
A: Transitioning to a US-based operation is a major undertaking that requires managing multiple complex workstreams simultaneously. Key challenges include:
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Navigating unfamiliar US labor laws and hiring practices.
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Managing facility sourcing, leasing, and buildouts.
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Integrating supply chain systems and localized logistics networks.
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Overcoming the “learning curve” of standing up a facility in a new market for the first time.
Q: How long does it typically take to stand up a US distribution operation?
A: Timelines vary significantly based on the scale of the operation and whether a company chooses to build a new facility or lease an existing one. Success depends heavily on establishing realistic timelines from the beginning. Companies must account for regulatory approvals, workforce recruitment, equipment lead times, and system testing before becoming fully operational.
Q: How can FHI help companies expanding into the US market?
A: FHI supports international companies through every phase of their US expansion. From the initial planning conversations and strategic design to the hands-on management of labor, systems, and day-to-day logistics, FHI helps companies mitigate risks and execute a smooth, operationally sound launch.
We’re here to help. There’s no pitch – just a conversation.