Global Supply Chains: The Looming "Great Reallocation" / Laura Alfaro, Davin Chor.

Format:

Book

Author/Creator:

Alfaro, Laura.

Contributor:

National Bureau of Economic Research.

Chor, Davin.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31661.

NBER working paper series no. w31661

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

Global supply chains have come under unprecedented stress as a result of US-China trade tensions, the Covid-19 pandemic, and geopolitical shocks. We document shifts in the pattern of US participation in global value chains over the last four decades, in terms of partner countries, products, and modes, with a focus on the last five years (2017-2022). The available data point to a looming "great reallocation" in supply chain activity: Direct US sourcing from China has decreased, with low-wage locations (principally: Vietnam) and nearshoring/friendshoring alternatives (notably: Mexico) gaining in import share. The production line positioning of the US' imports has also become more upstream, which is indicative of some reshoring of production stages. We sound several cautionary notes over the policies that have set this reallocation in motion: It is unclear if these measures will reduce US dependence on supply chains linked to China, and there are moreover already signs that prices of imports from Vietnam and Mexico are on the rise.

Notes:

Print version record

September 2023.