Business Development

Made In the USA is Making a Comeback in the Wake of Supply Chain Shortages

By Arnab Dey

January 20, 2022

Supply Chain Shortages

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Once upon a time, the “Made in the USA” moniker stood for quality and pride. Goods were not only being manufactured in our own country but they were also considered dependable and therefore long-lasting. They had value. What’s more, goods made in the USA also put Americans to work.

For instance, union clothing made in the USA stood and still stands for quality. Full stop. However, for decades, manufacturing of products from clothing to iPhones wereshipped overseas to China and other countries where labor is cheap and environmental regulations almost nonexistent.

But now, in the wake of the ongoing supply chain issues that are plaguing both businesses and consumers, a new call for products made in the good old USA is reemerging.

According to a new report, the United States has been issued a double whammy between the COVID-19 crisis and the supply chain shortage of consumer goods which caught federal government officials flatfooted. The shortages include a wide array of products from prescription medicines to car parts to bicycles.

The problems get worse since U.S.-based companies find it impossible to assemble goods that require components from overseas markets, like computer chips from Taiwan for instance. The problem isn’t affecting all companies the same way, or so the experts say.

Regardless of the global supply chain problem, some U.S. businesses and manufacturers are now relying on domestic suppliers to provide them with the parts and components they need to keep their businesses running as smoothly as possible.

Transoceanic Supply Chains

Supply Chain Shortages

But for the most part, U.S. companies continue to struggle. What’s said to be standing in the way of their success is “a breakdown in the transoceanic supply chains” which extend from Asian ports to American ports such as those in LA and Long Beach.

This breakdown, in turn, extends all the way to America’s heartland where many manufacturing plants are located.

What has been exposed during the crisis is the U.S.’s overreliance on imported goods. So then, what’s the obvious solution? America must start the process of reclaiming these key manufacturing sectors in order to become more self-reliant.

What’s promising is that at least some U.S. manufacturers are already displaying the overall advantages of working with domestic suppliers.

The COVID-19 Domino Effect

Say the experts, here’s how the COVID-19 pandemic led to some of the product shortages: One prime example is that when the virus first emerged from out of China, many countries immediately banned “essential medicines and health care materials” in order to conserve their own supplies.

What this resulted in was that U.S. hospitals were left to struggle to provide even the most basic medicines, protective equipment, and healthcare materials.

Thus began what’s been described as a kind of supply chain shortage domino effect throughout many industries from healthcare to automobiles to lumber. Ports and factories in many countries including China either slowed down production or stopped altogether.

A direct result of this was an increase in demand for typical household goods that you usually find at your local mega-mart or even on Amazon. Overseas suppliers continue to find it almost impossible to keep up with the demand.

Congestion at Major Seaports

Supply Chain Shortages

In the wake of all these production issues, cargo ships have been hit with major bottlenecks at the U.S.’s busiest ports. Countless ships are backed up awaiting entry into the U.S.

The major backlog is said to have spiked the price of China cargo to upwards of five times higher than it was a year ago at this time.

The consequence of these price spikes is that U.S. consumers are not only facing product shortages but major price increases on the goods they can actually get their hands on.

Domestic producers are also grappling with the overseas components they need to assemble products like trucks and cars.

While the major news outlets have been giving this major catastrophe of a story limited attention, they have also been ignoring what seems to some as an obvious solution.

That is, the production of more goods in the U.S. along with the resumption of natural gas production which the current POTUS stopped with a stroke of a pen, leaving the U.S. once again dependent on foreign energy sources.

A major shoot-from-the-hip decision that affects all Americans and that was hardly well thought out.

Washington D.C. must face facts. Relying on China for cheaply made goods is a dead end. American must focus on rebuilding its domestic manufacturing base and reinstating the energy independence (and exports) that we enjoyed during the 4 year period between 2016 and 2020.

Experts warn that the national dependence on China for cheap goods, from medical supplies to household goods, and foreign energy sources for the gas we put in our tanks and use to heat our homes, is nothing short of dangerous.

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Arnab Dey

Arnab is a passionate blogger. He shares sentient blogs on topics like current affairs, business, lifestyle, health, etc. To get more of his contributions, follow Smart Business Daily.

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