The White House says supply chain hurdles will persist after the Covid pandemic

In the report, the administration noted its efforts to identify vulnerabilities in supply chains for key products such as semiconductors, electric car batteries, some metals and pharmaceutical products, and to boost US manufacturing through expanded federal purchasing and other investments.

“The public sector can be a partner to the private sector, not a competitor,” the report said.

In a blog Thursday, Sarah Bianchi, the deputy US trade representative, said trade negotiators have been working with officials in Canada, Mexico, the European Union, South Korea, Japan, Britain and elsewhere to identify and address bottlenecks in supply chains. .

But some economists note that making supply chains more flexible can lead to their own costs, making products more expensive when inflation is already a major concern.

Adam S Posen, president of the Peterson Institute for International Economics in Washington, said the pandemic and Russia’s invasion of Ukraine could lead companies to locate at least some of their supply chains in places that are more politically stable and less strategically vulnerable. But getting companies to repeat production could waste taxpayer money and create inefficiencies, raising prices for consumers and slowing growth.

“At best,” he said, “you pay a premium.” “At worst, you are doing something for purely political reasons which is economically inefficient.”

Other economists have emphasized that global supply chains are not always a source of fragility – sometimes they can be a source of resilience too.

Ngozi Okonjo-Iweala, Director-General of the World Trade Organization, said in an interview that the world was witnessing a trend towards decentralization in manufacturing and production, as supply chains were moving from China to Vietnam, Laos, Cambodia, Bangladesh, Ethiopia and other countries. She said this is an opportunity to diversify supply chains and bring poorer countries into the global trading system, allowing them to reap the fruits of globalization as well.

Leave a Comment

Your email address will not be published.