Dominican Republic: US companies shifting manufacturing from highly tariffed nations to Dominican Republic
"US companies are scrambling to move supply chains. This small island could be the answer", 4 June 2025
President Donald Trump had just announced a 25% duty on Mexico and Canada – what would be the first of many tariffs on other countries. World Emblem, the world’s largest producer of clothing patches which counts the Department of Homeland Security, UPS, NHL, and Levi’s as customers, produces 65% of its patches in Aguascalientes, Mexico...
World Emblem, like many other US companies, is scrambling to move manufacturing out of highly tariffed nations like Mexico and China...While many businesses are shifting manufacturing to southeast Asian countries like Vietnam and Malaysia, Carr looked a bit closer to home: the Dominican Republic...
The country has several key factors attractive to companies: a stable government, a skilled workforce, proximity to the United States, and the so-called free zones, where 60% of the country’s manufacturing is located...
“We have seen, especially from China, some US companies moving or announcing operations shifting to the Dominican Republic over the past few months.”
Apparel maker Hanes, footwear brand Timberland, aerospace companies like the Eaton Corporation, IT companies like Rockwell Automation, and medical device companies like Cardinal Health all have manufacturing facilities in the Dominican Republic.
World Emblem...plans to eventually move 30-35% of its manufacturing capacity to the Dominican Republic...
There are 92 free zones (FZs) in the Dominican Republic that house over 850 companies, according to the National Free Zone Council...while not exempt from tariffs, they do allow companies to avoid 100% of taxes on things like income, export, local, and some import taxes on machinery and intellectual property...
“The FZs present a very attractive environment for near-shored manufacturing, particularly of goods intended for export to North American markets,”...
Wages are also about 30% lower in the Dominican Republic compared to Mexico, a country known for its cheap labor, according to Carr...