Founder’s Note: The views expressed in this blog post are my personal opinions as the Founder of YOVEO Digital, and do not necessarily reflect the official viewpoint of the company.
The “America First” policy, spearheaded by President Trump, is sending ripples through the business process outsourcing (BPO) and small business outsourced support industries. With a Republican-controlled Congress, the administration’s focus on bringing jobs back to the US is reshaping the outsourcing landscape.
Tariffs Take Center Stage. Increased tariffs on imported goods are driving up costs for US companies, including those relying on overseas technology and infrastructure. This could make traditional offshore outsourcing less attractive, pushing some businesses to reconsider their strategies.
Re-shoring Gains Momentum. The political rhetoric and implemented policies are incentivizing companies to bring operations back to the US. While this aims to boost domestic employment, it poses a direct challenge to the established BPO model that thrives on international labor.
| Policy Change | Effective Date | Affected Countries/Regions | Potential Impact on BPO Industry |
|
25% tariff on steel and aluminum imports |
Mar 12, 2025 |
Global |
Increased costs for infrastructure, potential for retaliatory measures affecting demand for US-based BPO. |
|
Increased tariffs on Chinese imports (up to ~70%) |
Apr 2, 2025 |
China |
Reduced demand for US BPO serving Chinese companies, potential shift of manufacturing and related BPO needs. |
|
25% tariff on most Canadian and Mexican goods |
Mar 4, 2025 |
Canada, Mexico |
Potential increase in nearshoring activities, but also increased costs for some inputs. |
|
25% tariff on imported automobiles and auto parts |
Apr 3, 2025 |
Global |
Indirect impact on BPO supporting automotive sector, potential for reshoring in automotive industry affecting related BPO. |
|
10% global tariff on all imports |
Apr 5, 2025 |
Global (excluding Canada & Mexico) |
Increased operational costs for BPO relying on imported technology, potential for increased attractiveness of lower-cost offshore locations. |
|
11-50% “reciprocal tariffs” on select countries |
Apr 9, 2025 |
57 identified countries |
Significant cost increases for imports from these regions, potentially impacting BPO operations relying on specific technologies or services from these countries, could lead to shifts in sourcing. |
|
Termination of de minimis for China and Hong Kong |
May 2, 2025 |
China, Hong Kong |
Increased costs for small packages, potentially affecting BPO companies involved in e-commerce support or logistics. |
Small Businesses Navigate Uncertainty. US small businesses are facing economic uncertainty and rising inflation, impacting their demand for outsourced support. While some may cut back on these services, others might seek more cost-effective outsourcing solutions or explore domestic alternatives.
Global Implications. The “America First” approach is also influencing international business relations, particularly with major BPO hubs like the Philippines and India. These countries are bracing for potential policy shifts that could affect outsourcing contracts and the flow of foreign investment.
A Shifting Tide. The US political climate is pushing the outsourcing industry towards a significant transformation. Companies are adapting by exploring nearshoring options, focusing on higher-value services, and increasing their reliance on automation and AI.
The future of outsourcing in this “America First” era hinges on the industry’s ability to be agile, innovative, and strategically navigate the evolving political and economic currents.