Supply Chain

Supply chain policy addresses the networks through which the United States sources raw materials, manufactures goods, and delivers them to consumers and businesses — and how vulnerable those networks are to disruption. COVID-19 triggered the most severe peacetime supply chain crisis in modern history: factory shutdowns in Asia cascaded into shortages of semiconductors, PPE, lumber, shipping containers, and consumer goods, contributing to inflation and revealing dangerous dependencies on concentrated foreign manufacturing. The most acute concern is semiconductor chips — the essential components in everything from smartphones to military weapons systems — of which the vast majority are manufactured in Taiwan and South Korea. A Chinese invasion or blockade of Taiwan could cut off U.S. access to advanced chips entirely. The CHIPS and Science Act (2022) responded with $52 billion to rebuild domestic semiconductor manufacturing, with Intel, TSMC, Samsung, and Micron all announcing major U.S. fab investments. The Inflation Reduction Act incentivized domestic manufacturing of electric vehicle batteries and clean energy components. Separately, the U.S. imports significant shares of its pharmaceuticals, rare earth minerals, and strategic metals from China — creating leverage China could exploit in a conflict or trade war. 'Friend-shoring' and 'near-shoring' — shifting supply chains to allied and neighboring countries — have become strategic goals. The Port of Los Angeles and Long Beach together handle nearly 40% of U.S. container imports; the 2021 port backlogs demonstrated how bottlenecks in a few chokepoints can ripple across the entire economy.