US Supply Chain Reliance.pdf

Measuring US Supply Chain Reliance" by Richard Baldwin, Rebecca Freeman, and Angelos Theodorakopoulos analyzes the US supply chain's reliance on foreign suppliers, particularly China. Key findings include:

US exposure to foreign suppliers is larger than what conventional trade data suggests, with a significant portion of US industrial inputs sourced from abroad, especially from China.
Despite this, over 80% of US industrial inputs are still sourced domestically, making the overall exposure relatively modest at the macro level.
Recent supply chain disruptions have been largely systemic, rather than idiosyncratic, and are likely to arise from climate change, geoeconomic tensions, and digital disruptions.
The authors propose a three-pillar framework to organize thinking about supply chain disruptions: measuring the links that constitute global supply chains, understanding the shocks that disrupt them, and examining private and public measures to mitigate disruptions.
* The paper uses global input-output data to measure supply chain exposure and finds that US manufacturing companies have significant hidden exposure to foreign suppliers, particularly China.

The authors conclude that concerns regarding supply chain disruptions and policies to address them should focus on individual products rather than the whole manufacturing sector. They also emphasize the need for improved supply chain transparency and understanding of where potential weak points lie.