G7 nations shift supply chains amid de-risking, China retaliates

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G7 nations shift supply chains amid de-risking, China retaliates

In the wake of escalating operational risks and retaliatory measures from China, G7 nations, along with businesses such as Dell (NYSE: DELL ), Apple (NASDAQ: AAPL ), HP (NYSE: HPQ ), and Mattel (NASDAQ: MAT ), have started shifting their supply chains from China to friend-shoring and nearshoring countries like India, Thailand, Vietnam, Mexico, and Canada. This significant shift has been observed on Wednesday.

The retaliatory measures from China have had a profound impact on companies such as Micron Technology (NASDAQ: MU ) and led to an iPhone ban, resulting in a sales decline for US brands since 2018. Notably, GM experienced a significant market share drop due to these developments.

De-risking efforts have inadvertently increased operational risks such as supply chain complexity and lack of transparency. Companies like South Korea’s SK Hynix and Boeing (NYSE: BA ) have been affected by these challenges. Boeing's 787 aircraft production has faced setbacks due to these complications.

To mitigate the potential fallouts of this shift, several measures have been put in place. Government support has been extended in the form of the $52.7 billion US Chips Act subsidies. International agreements like the Indo-Pacific Economic Framework and CPTPP have also been implemented to help navigate these changes.

Another significant factor influencing supply chain decisions is the US Uyghur Forced Labor Protection Act. The legislation has further complicated the global supply chain landscape, adding another layer of consideration for companies as they make strategic decisions about their operations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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