<p>This paper examines how an original equipment manufacturer (OEM) reevaluates its global sourcing strategies. The OEM faces the option to outsource to a competitive contract manufacturer (CCM) in a tariff-imposed country, but this choice incurs additional tariff costs. Alternatively, the OEM can relocate to a tariff-exempt country and outsource to a new non-competitive contract manufacturer (NCM) with uncertain yields. The OEM can also reshore production back to the home country, but this choice would result in higher production costs. In this paper, we model three players’ profits, using Cournot competition in the three situations above. We study the base and extended cases the OEM is facing—without and with the competition from the contract manufacturer. We derive the OEM’s optimal solutions and sourcing strategies in base and extended cases. In the base case, the OEM’s optimal strategy is to remain in the tariff country when the tariffs are low. However, the OEM should relocate to a tariff-exempt country or to reshore as the tariffs rise to a certain level. We find that the production cost differential influences the OEM’s decision to relocate to the tariff-exempt country or to reshore after the OEM decides to exit the tariff-imposed country. In the extended case where the CCM enters the competition, we observe that the competition reduces the OEM’s product quantities and prices but enhances consumer utility. The numerical analysis offers managerial insights into how the OEM selects a particular outsourcing strategy based on the interplay of tariffs, uncertain production yields, production cost differentials, and competition from the CCM.</p>