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Just Say No to “Friend-Shoring”

Following major shocks to global supply chains in recent years, it is not surprising that governments are groping for new policies to build more resilience and ensure a continuous supply of critical inputs. But abandoning free and fair trade is not the answer.

CHICAGO – In an important speech to the Atlantic Council in April, US Secretary of the Treasury Janet Yellen issued a welcome call for revitalizing the world economic order. But she also generated headlines with a single sentence advocating what she called “friend-shoring”: that is, limiting the trade of key inputs to trusted countries in order to reduce risks to the supply chains on which the United States and its partners rely.