Issue Rerouting through third countries may raise indirect imports from China rather than cut them

Summary

This issue records the report's own caveat about supply chain reconfiguration. Skepticism remains about whether efforts to build more resilient supply chains are economically viable. Western attempts to reduce dependence on China may shift production to countries such as India, Vietnam, Thailand and Mexico. However, when these trading partners are themselves highly reliant on Chinese exports, the effect can be the opposite of what was intended. The net result can be an increase in indirect imports from China to the West. The issue warns that rerouting trade through third countries may change the path of dependence without reducing it.