The White House Economic Advisers (Council of Economic Advisers) released a report on Thursday (14th) saying that although the epidemic has exposed the fragility of the supply chain, it is not the source of the problem - these problems will not disappear after the epidemic is over.

According to the "New York Times" report on the 14th, the report pointed out that in recent decades, American manufacturers have increasingly relied on components produced in low-cost countries, especially China, a practice known as offshore production. At the same time, companies have adopted a just-in-time strategy to minimize inventories of parts and materials to maximize shareholder returns.

"Many supply chains have become complex and fragile due to outsourcing, offshoring and insufficient investment in resilience." "This evolution has also been driven by short-sighted assumptions about cost-cutting, ignoring important costs that are difficult to translate into financial metrics, Or spillovers affect costs elsewhere.”

Cecilia Rouse, chair of the Council of Economic Advisers, said in an interview: “The U.S. is one of the strongest economies in the world and still is one of them, but if we look at trends over the past few decades, some of those trends may be would undermine that status." Part of the problem is that "the public sector has withdrawn from its role".

The report also cited U.S. government efforts to identify supply chain weaknesses in key products such as semiconductors, electric vehicle batteries, certain minerals and pharmaceuticals, as well as boost U.S. manufacturing through expanded federal procurement and other investments. "The public sector can be a partner to the private sector, not a competitor."

Deputy U.S. Trade Representative Sarah Bianchi said in a blog post that day that trade negotiators have been working with officials in Canada, Mexico, the European Union, South Korea, Japan, the U.K. and elsewhere to identify and resolve bottlenecks in supply chains. .

However, some economists point to the potential cost of improving supply chain resilience, making products more expensive at a time when inflation has become a major concern.

The coronavirus pandemic and the Russia-Ukraine conflict could lead companies to base at least part of their supply chains on a more politically stable and less strategically fragile position, said Adam S. Posen, chief economist at the Peterson Institute for International Economics. The place. But pushing firms to replicate production could waste taxpayer money, lead to inefficiencies, raise prices for consumers, and slow growth.

Based on this, while White House economists emphasize the role of the public sector in the economy, they recommend only modest measures by the federal government to strengthen supply chains. They suggested governments help collect and disseminate data to make it easier for companies to understand their supply chains and spot weaknesses. They also said the government could encourage domestic production of products critical to national security or other core interests.

Experts from third-party agencies said the measures could be useful but unlikely to address the problems outlined in the report. "Simply put, the answer is not easy," said Chad P. Bown, a trade economist and senior fellow at the Peterson Institute for International Economics.