The United States has discovered that its supply chain cannot do without China!

Foreign media reported that the "Made in China " label is everywhere in the United States, from industrial machinery to a pair of flip-flops , almost all items have this label .

He also said that the United States believes that there are risks in the supply chain's continued reliance on China . Many factors , from rising costs to the global epidemic, will prompt companies to reconsider their relationship with suppliers and China.

The risk to the United States of being a single supplier to China has become more apparent during the COVID-19 pandemic, when manufacturing and supplier operations in many parts of China came to a standstill in early 2020. The impact rippled across the Pacific, affecting U.S. importers who were unable to source goods.

Camille Batiste, senior vice president of global supply chain and procurement at Archer Daniels Midland , also said that the main suppliers for several key ingredients for the company's products are all located in China. When the pandemic disrupted production and exports from China, Batiste and her team had to "look around for other suppliers."

Eventually they found the right raw material in South America, but it was not exactly the same as what they were used to bringing in from China , forcing them to adjust the materials used in manufacturing . The company’s actions exposed the long-term risks of having a dominant supplier in one region or country.

“We need to build a supply chain that can also receive materials from other places,” Batiste said . “We just need to always have ... multiple sources.”

As the pandemic spreads, no sourcing destination is immune. Lockdowns will be lifted in one region, only to be reimposed in another. Sole sourcing from China isn’t the only risk; sole sourcing from any region is a risk.

When the U.S. imposed Section 301 tariffs on imports from China , many companies looked to Vietnam. Eddie Maleski, director of the Duke Center for International Development , said the country has a high literacy rate and relatively low labor costs. And many foreign investors believe Vietnam is relatively stable politically and property rights are more secure. Electronics and auto parts are growing in Vietnam.

Tom Gould, vice president of global customs at Flexport, also said that Vietnam is stepping up its efforts in a way that attracts businesses. This means that suppliers in Vietnam need to figure out sourcing, production, quality assurance, environmental issues and labor issues. Vietnam already has the ability to manufacture the products that customers need.

Not only in Vietnam, many American companies are also looking for suppliers in Bangladesh, Thailand, Indonesia and Malaysia. But human rights issues persist throughout Southeast Asia. Many countries in the region also lack developed transportation infrastructure and ports, which only increases delivery time and risks.

The same risk factors that drive supply chain diversification also lead them to consider relocating to the United States, where proximity allows for shorter shipping times, lower emissions and the ability to tout a “Made in the USA” label. Import tariffs are less of an issue. Total cost of ownership is typically lower.

A Thomas survey of respondents in March found that 83% of manufacturers were likely, probably or extremely likely to re-land, up from 54% in March 2020. Asia and Latin America.

Diversification doesn’t stop at the first tier. Some members of a procurement industry group thought they were diversifying by adding a supplier in Vietnam, only to discover that supplier was buying materials and components from the same locations as Chinese suppliers. “At the end of the day, almost every road leads to China,”

In today’s world, it is difficult to imagine a supply chain that is completely disconnected from China, whether it is a first-level or fourth-level connection.

China is the most common sourcing destination for U.S. fashion companies, according to the American Fashion Industry Council ’s 2021 Fashion Industry Benchmark Study. Machinery, toys and plastics often come from China. The pharmaceutical supply chain relies heavily on overseas production.

The United States has discovered that its supply chain cannot be separated from China