To those already predisposed to favor domestic production over international trade, the COVID-19 pandemic seems like a case in point. Yet a closer look at the facts shows that, if anything, the current crisis offers powerful evidence of why we need global supply chains and widely distributed production.
NEW HAVEN – The COVID-19 crisis has emboldened advocates of protectionism and deglobalization. Familiar concerns about lost manufacturing jobs and rising inequality, or the desire in some circles to “punish” (scapegoat) China with higher tariffs, have now been augmented by an argument against global supply chains. According to this view, widely distributed production has made economies less self-sufficient, and therefore less resilient. The solution is to reshore existing business operations, offshore less in the future, and reduce reliance on trade more generally.
NEW HAVEN – The COVID-19 crisis has emboldened advocates of protectionism and deglobalization. Familiar concerns about lost manufacturing jobs and rising inequality, or the desire in some circles to “punish” (scapegoat) China with higher tariffs, have now been augmented by an argument against global supply chains. According to this view, widely distributed production has made economies less self-sufficient, and therefore less resilient. The solution is to reshore existing business operations, offshore less in the future, and reduce reliance on trade more generally.