The disruption to the global supply chains in the context of COVID-19 made evident the shortcomings of having global supply chains spread out across the globe and re-opened the discussion about the advantages of having shorter, regionalized supply chains. Technology, automation, and additive manufacturing have been slowly reducing labor requirements for several tasks and therefore diminishing the need to produce in low labor costs countries-regions to supply markets far away.

Climate change has also been encouraging consolidating production close to consumer markets to minimize the disruption risks of more frequent and severe weather events and to reduce their carbon footprint. The United States-China trade war made sourcing from China more expensive and threatened the disruption of supply chains geographically concentrated in China. Developing capabilities across regions, reduces the risks owing to global drawn-out supply chains that can be disrupted by events happening in other regions.

The Covid-19 pandemic revealed the vulnerability of supply chains to disruptions in countries that play a central role in global supply chains as is the case of some Chinese companies in electronics, auto industries, pharmaceuticals, metals, and personal protective equipment, among others. When the Chinese economy shutdown due to the outbreak of the new coronavirus disease, and restrictions were imposed on transport and travel, supply chains were disrupted around the globe, and U.S.

manufacturers and distributors struggled to supply the U.S. market including of key COVID-19 medical equipment and supplies. This prompted policymakers and businesses to consider actions to improve the resiliency of supply chains to future shocks. Considerations include whether and how to incentivize additional production of health supplies and pharmaceuticals in the United States (reshoring) or in its neighboring countries (near-shoring), diversification of production and suppliers and addressing dependency in other industries such as pharmaceuticals. telecommunications, microelectronics, and or semiconductors, among others.

While diversification of production and suppliers is desirable, it can prove very costly if not an unsurmountable challenge. The cost of adding resiliency may not be feasible. Besides, often, the sophistication of the components involves manufacturing processes that require specialists. For example, companies like Apple and Qualcomm are entirely dependent on one company for their most advanced chips –Taiwan Semiconductor Manufacturing Company (TSMC), that represents the largest global market share of most advanced chipmaking processes (Shih, 2020). According to some experts, the magnitude of the challenge of finding or developing an alternate source of supply to TSMC is one of the reasons behind the Chinese government’s Made in China 2025 initiative, the state-led industrial policy aimed at rapidly expanding its high-tech sectors and developing its advanced manufacturing base.

There are, however, some industries that could diversify their supply base if they are willing to buy from higher-cost producers. Those are industries whose supply concentration was the result of prioritizing price and efficiency over diversity or resiliency.

This paper focuses on the impact on three industries to exemplify the disruption that took place in supply chains during the global pandemic; and the measures taken by the United States government to confront the disruption in the short run and protect the health and livelihood of its citizenry.