Trend Revival of industrial policy fragments global supply chains

Summary

Major economies are reviving industrial policy to strengthen their own supply chains, and the report sees this raising the risk of disruption and fragmentation worldwide. Washington has made reducing supply-chain dependence on China a core economic security task, pairing reshoring under a Made in America banner with efforts to cut Chinese inputs. Beijing answers with retaliation such as critical mineral export controls while building up its own supply capacity. The resulting competition is producing bloc-based supply chains, weaker global trade through strategic decoupling and growing pressure on third countries through secondary sanctions on re-exports. Export restrictions on key components such as semiconductors and on critical minerals such as rare earths are also distorting supply chains.