US Treasury Secretary Janet Yellen (pictured at a press conference ahead of the G-20 meeting in Bali on July 14) said supply chain resilience is a key focus of the Biden-Harris administration.
Made by Nagi | Reuters
US Treasury Secretary Janet Yellen reaffirmed the need for the United States and its trusted trading partners to increase supply chain resilience through “pegging to friends,” but said this does not mean the US is backing away from the rest of the world.
In a speech Tuesday at South Korean conglomerate LG’s Science Park in Seoul, Yellen enlisted the support of US allies to work together to create more resilient supply chains among trusted partners through “friendshoring.”
The term is based on onshoring and nearshoring, which refer to moving supply chains home or closer to home, as opposed to being located in foreign countries. “Friend-shoring” goes beyond that, but limits supply chain networks. allies and friendly countries.
The US has been pushing for more security in its supply chains since the start of the pandemic. In early 2021, US President Joe Biden signed an executive order to overhaul US supply chains to reduce dependence on foreign suppliers.
“Supply chain resilience is a key focus of the Biden-Harris administration. And the need for this work has been clearly demonstrated by the events of the past two years, first by Covid-19 and our efforts to combat the pandemic, and now by Russia. brutal war of aggression in Ukraine,” Yellen said.
“Together they have reshaped the contours of global supply chains and trade.”
“Working with allies and partners through the search for friends is an important element in strengthening economic resilience while maintaining the dynamism and productivity growth associated with economic integration.”
However, these initiatives have raised concerns about global economic disengagement, especially as the United States and other countries seek to avoid overdependence on China.
Yellen said the measures do not indicate that the US is pulling out of world trade. Rather, she says, they show that friendly countries are looking at vulnerabilities in the long term, seeking to make their economies more productive.
“We don’t want to back out of the world by forcing us to give up the benefits it brings to the American people and markets for business and exports,” Yellen said, referring to deepening ties with South Korea.
“By doing so, we can help shield both American and Korean households from price increases and disruptions caused by geopolitical and economic risks… in that sense, we can continue to strengthen the international system that we have all benefited from while protecting ourselves. because of vulnerabilities in global trade networks.”
Supply chain resilience dominated this phase of Yellen’s visit to Asia, which followed a trip to Bali last week for a G-20 meeting.
South Korea’s LG also confirmed its latest U.S. collaboration, a $1.7 billion expansion of lithium-ion battery production in Michigan, while Yellen talked about Hyundai’s electric vehicle and battery facilities in Georgia and Samsung’s semiconductor chip manufacturing facility in Texas.
Yellen added that other projects that support supply chain resilience efforts include the recently announced Indo-Pacific economic structure.
“With friend-shoring, South Korea and the US are in an ideal position,” James Kim, chairman of AmCham South Korea, told CNBC’s Capital Connection.
“This is the most exciting stage I have seen in the last 18 years.”
Kim said that while there is more direct South Korean investment in the United States than the other way around, American interests in the Asian country are growing.
A recent survey by AmCham shows that for the first time, South Korea is the second most attractive regional headquarters in Asia after Singapore, Kim says.
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