Geopolitical Tensions and Tariffs: Could Global Risks Shift Call Centers Back to the U.S.?

As global political dynamics shift, many companies are re-evaluating their call center location strategies. Recent discussions around increased tariffs, immigration restrictions, political instability, and rising cyber threats have triggered fresh concerns for organizations operating in nearshore and offshore geographies. Countries like the Philippines, India, South Africa, and key Latin American markets such as Colombia, Mexico, and the Dominican Republic have long been go-to locations due to their substantial cost savings. But are these savings enough to offset the growing risk?

Site Selection Group closely monitors these developments through our proprietary market intelligence to help companies make informed, risk-adjusted decisions about their global customer experience operations.

The appeal of nearshore and offshore locations

For years, offshore and nearshore call center destinations have offered undeniable advantages:

• Labor cost savings of 50%-75% compared to U.S. markets.
• Strong language capabilities, particularly in English and Spanish.
• Growing BPO ecosystems supported by local government investment.
• Cultural alignment in many customer service roles.

The rising impact of global tensions

Recent global events have introduced new variables into location decisions:

• Tariff threats and trade disputes with countries like China and Mexico.
• Political instability in emerging markets, especially during election cycles.
• Cybersecurity concerns in countries with limited regulatory oversight.
• Currency volatility, which impacts cost predictability.
• Supply chain disruptions and infrastructure weaknesses in some regions.

While these tensions have yet to cause large-scale reshoring to the U.S., companies are being more cautious,  especially those in regulated industries like:

• Healthcare: Sensitive patient data and HIPAA compliance drive stricter vendor and geography requirements.
• Insurance and Financial Services: Fintech and banking companies face growing KYC, data privacy, and security demands.
• Government Services: This sector is especially influenced by politics, preferring U.S.-based solutions.

Is reshoring a realistic option?

While geopolitical pressures might suggest a return to onshore call center models, the cost gap remains significant:

• U.S. wages average $17–$21 per hour.
• Nearshore wages in LACA average $4–$6 per hour.
• Offshore markets like the Philippines and India remain as low as $2–$4 per hour.

Given this disparity, full-scale reshoring is unlikely for most companies, especially in cost-sensitive industries like telecom, retail, and e-commerce. However, we’re seeing new trends emerge:

• Hybrid models: Keeping high-sensitivity work in the U.S. while outsourcing lower-risk interactions.
• Multishore diversification: Expanding into multiple countries to mitigate concentration risk.
• “Friend-shoring”: Prioritizing locations with political alignment and economic treaties with the U.S.
• Leveraging technology: Utilization of the latest artificial intelligence tools and technology can help to offset the reliance on nearshore and offshore resources.

What companies should do now

To stay ahead of the risks while maintaining cost efficiency, companies should consider:

• Re-evaluating their global footprint with a balanced risk-cost lens.
• Conducting regular geopolitical and compliance risk assessments for current outsourcing locations.
• Exploring alternate markets within regions that offer cost advantages with increasing stability.
• Engaging site selection experts like Site Selection Group to analyze market volatility, labor quality, real estate availability, and economic incentives.

Conclusion

While geopolitical and trade-related risks are rising, the economics of outsourcing remain hard to beat, particularly for customer care, back-office processing, and tech support. However, the calculus is shifting. Companies must be smarter and more strategic in their call center site selection to ensure resiliency in the face of an unpredictable global landscape.

By leveraging data-driven location strategy, diversified operations, and thorough risk analysis, companies can continue to harness the benefits of global outsourcing while reducing their exposure to the next political or economic shock. 

Reach out to one of our site selection experts at Site Selection Group to find the best location for you.