The United States is working with partners to ensure global supply chains stay flexible and resilient and are not overly dependent on any one source of manufacturing or production.
Supply chains are the threads that tie the global economy together. Supply chains carry parts to factories around the world and products to stores and homes.
But when too many of these global supply chains are connected to one country they can be easily disrupted or abused.
This problem was made especially clear during COVID-19, when disruptions in China led to shortages in medical supplies all over the world. And it was made even worse by the Chinese Communist Party’s (CCP) undemocratic one-party rule.
That is why the United States is working with like-minded partners to ensure that global supply chains are stronger and more reliable as it mobilizes its vast resources to support the global economic recovery after the COVID-19 pandemic.
“The COVID-19 pandemic has highlighted the risks of overreliance on single suppliers of goods critical to national security,” said a U.S. Department of State fact sheet on the importance of supply chains. “To protect our businesses and overall prosperity, we must diversify global supply chains,” it added.
U.S. GEAR strategy will help countries rebuild
The work to diversify supply chains is part of the State Department’s Global Economic Activity and Recovery (GEAR) strategy, a broad effort to use the strength of the U.S. economy to help countries rebuild after the pandemic.
The GEAR strategy will facilitate “rapid growth and spur economic recovery that will directly benefit our citizens and the rest of the world,” said Sarah Weber, a senior adviser in the State Department’s Bureau of Economic and Business Affairs.
The strategy also focuses on restoring international transportation and travel networks, supporting U.S. businesses, promoting U.S. exports, deploying financial tools for economic recovery, and enabling food trade and security in the wake of the pandemic’s disruptions.
It builds on the United States’ leadership in the global fight against the COVID-19 pandemic, which includes billions of dollars invested in humanitarian aid, public health and Operation Warp Speed, which has led to the development of safe and effective vaccines.
These developments have helped strengthen commercial ties with U.S. companies and given a boost to developing economies in countries like Bangladesh, Thailand and Vietnam.
Risks of doing business with the People’s Republic of China
The GEAR strategy is not the first time the United States has urged businesses and international partners to look closely at their supply chains in China.
In July the U.S. government released the Xinjiang Supply Chain Business Advisory and issued an open letter to business leaders whose supply chains are connected to the PRC and who do business with PRC firms that support the CCP’s campaign of forced labor, mass internment, and repression against Uyghurs and other ethnic and religious minorities.
The CCP has also abused the PRC’s position in global supply chains, including withholding raw materials from other countries during political disputes.
To preserve and promote security, resilience and prosperity, countries and businesses should prioritize supply chains in countries “where the rule of law is respected and where institutions are accountable to citizens and consumers, rather than countries with a record of predatory economic policies,” the State Department fact sheet said.