"Friendshoring" is a strategy where governments encourage businesses to reorganize their supply chains, moving production away from geopolitical rivals to friendly nations.
Western governments, including the Biden administration, are increasingly adopting such policies to reduce their dependence on hostile powers like China.
While friendshoring and similar approaches like nearshoring aim to enhance trade security, they may result in less efficient production when politics drive decisions instead of profit.
Despite efforts to reduce reliance on China, Western suppliers still depend on Chinese inputs in various industries. Research suggests that friendshoring could have negative economic consequences, potentially harming GDP and global expenditure.
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