Global Supply Chains & Reshoring
Geopolitical tensions and tariffs reshape production networks. 40% of US firms plan to relocate supply chains by 2026 as resilience trumps efficiency.
Key Supply Chain Insights
Reshoring Accelerates
40% of US companies plan to relocate at least part of their supply chains to North America by 2026 (Deloitte). Firms seek to shorten supply chains, reduce geopolitical exposure, and avoid tariff costs. Mexico emerges as major nearshoring destination with labor costs 20-30% below China.
Logistics Crisis Deepens
Global port congestion escalated to "full-scale logistics crisis" by June 2025. 96% of major container ports report operational disruptions with vessel delays surging 300% above normal. On-time arrivals dropped to 58.7% from pre-2020 average of 80-90%.
GVC Concentration Risk
Just 10 economies account for 53.5% of global domestic value-added in exports. Heavy dependence on China, EU, and US creates chokepoints when disruptions occur. GVC participation decreasing as firms pursue dual-sourcing and regional diversification strategies.
China Plus One Strategy
US imports from China decreased while Vietnam and India surged. Firms adopt "China+1" strategy maintaining Chinese production while adding alternative suppliers. 45% of tariff-exposed firms increased inventories, 39% pursued dual sourcing, 33% developed nearshoring plans.
Reshoring and Nearshoring Trends (2020-2025)
Number of US companies announcing production relocation
Key Finding: Reshoring announcements surged from 350 companies (2020) to over 900 (2024-2025), driven by tariffs, pandemic lessons, and geopolitical tensions. Nearshoring to Mexico/Canada accelerated even faster, reflecting "friend-shoring" priority.
Top GVC Economies (2024)
Share of global domestic value-added in exports (%)
Key Finding: China leads with 16.2% of global GVC value-added, followed by US (11.5%) and Germany (5.8%). Top 10 economies control 53.5% of global value chains, creating systemic concentration risk and chokepoints.
US Import Source Shifts (2020 vs 2024)
Share of US merchandise imports by country/region (%)
Key Finding: China's share dropped from 18.6% to 14.2%, while Mexico surged from 13.9% to 16.8%, Vietnam doubled to 4.8%, and India grew to 3.2%. Reflects "China+1" diversification and nearshoring momentum.
Supply Chain Mitigation Strategies (2025)
% of firms adopting each strategy in response to disruptions
Key Finding: Inventory increases (45%) lead mitigation efforts, followed by dual sourcing (39%), nearshoring (33%), and digitalization (28%). Firms prioritize resilience over just-in-time efficiency.
Understanding Supply Chains
What Are Global Value Chains (GVCs)?
GVCs represent the international fragmentation of production, where different stages occur in different countries. A smartphone might have chips designed in California, manufactured in Taiwan using Japanese equipment, assembled in China with components from South Korea, and sold globally.
Reshoring vs Nearshoring vs Friendshoring
- Reshoring: Bringing production back to home country
- Nearshoring: Moving production to nearby countries (e.g., US firms to Mexico)
- Friendshoring: Relocating to geopolitically aligned allies
Why Supply Chains Are Restructuring
Tariffs, pandemic disruptions, geopolitical tensions, climate risks, and semiconductor shortages exposed vulnerabilities in globally dispersed "just-in-time" supply chains optimized solely for cost. Firms now balance efficiency with resilience, regionalization, and security of supply.