Shockwaves from the COVID-19 pandemic and heightened geopolitical uncertainty exposed the hidden fragility of supply chains across the world. In industries ranging from semiconductors to automotive and consumer products, some businesses are rethinking their approach to manufacturing and considering whether production of certain products needs to be closer to their destination markets. Bolstered by the United States-Mexico-Canada Agreement (USMCA), they are seeking greater control over production, facilities, labour costs, transport and energy strategy. These states are leveraging positive policy developments, tax credits, worker skill training programmes and business-friendly initiatives to encourage companies to onshore certain key aspects of their supply chains. The transition from manufacturing certain goods in distant locations to closer sites, or generally diversifying supply chains, represents a significant shift for many corporates.

Source: Wall Street Journal July 11, 2023 13:06 UTC