Supply chain disruptions will linger after pandemic, White House says

White House officials say although the COVID-19 pandemic exacerbated supply chain issues, it did not create them and they will continue to cause disruptions once the pandemic ends, The New York Times reported April 14.

Economists analyzed supply chain disruptions as part of the Economic Report of the President, an annual document outlining the administration’s position on key issues and how the president hopes to address them.

One of the report’s seven chapters is dedicated to the supply chain. Offshoring, a practice the U.S. leans on in which countries rely on supplies produced in low-cost countries, is among the issues that has created an “efficient but brittle” supply chain.

“Because of outsourcing, offshoring and insufficient investment in resilience, many supply chains have become complex and fragile,” the report said. “This evolution has also been driven by shortsighted assumptions about cost reduction that have ignored important costs that are hard to turn into financial measures, or that spilled over to affect others.”

Officials offered several recommendations, including encouraging domestic production of essental products. However, independent experts say the suggestions are unlikely to solve the issues the report outlines.

“The short answer is there’s no easy answers,” Chad Bown, a trade economist and senior fellow at the Peterson Institute for International Economics, told the Times.