The Consumer Technology Association (CTA) has released a roadmap for U.S. policymakers outlining a path for decoupling supply chains from China. The study, titled "Building a Resilient U.S. Consumer Technology Supply Chain," recognizes that reshoring all tech manufacturing jobs from China to the U.S. is not feasible. However, it suggests that it would be possible to move all operations to allies and partners of the U.S.
According to the CTA, one key finding from the study is that dependence on China as a single geographical location poses a significant threat to supply chain resiliency for consumer technology. China currently leads in terms of its share of the supply chain for computers, communications, audio and video, and semiconductors and related technologies. The country accounts for approximately 40% of the global share of those exports, as well as 23% of U.S. consumption.
The report highlights that reshoring all tech manufacturing operations entirely back to the U.S. would require a massive $500 billion investment and a significant increase in the workforce, making it economically and practically infeasible. Instead, the report suggests that the U.S. could increase the contribution of its allies and partners to the tech supply chain from the current 66% up to 90%. The report proposes a "team approach" that involves relying more on key partners like Vietnam, India, Canada, Mexico, France, and Germany.
To facilitate the process of "nearshoring" and "friendshoring," policymakers could consider negotiating free trade agreements with the UK and Vietnam, eliminating trade barriers between the U.S. and India, becoming a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and strengthening the US-Mexico-Canada Agreement (USMCA).
CTA President and CEO Gary Shapiro emphasized the importance of diversified and cost-effective supply chains in delivering vital products to consumers. He stated, "This study shows that moving all manufacturing operations back to America just isn't feasible. But it also shows companies and policymakers what can be done now and over the next 10 years to ensure that American consumers can continue to efficiently access the technology and lifestyle improvements they want, expect, and deserve."
The roadmap provided by the CTA aims to guide U.S. policymakers in decoupling supply chains from China and creating a resilient consumer technology supply chain that relies on a wider network of allies and partners. By diversifying the supply chain and leveraging the strengths of other countries, the U.S. can mitigate risks and ensure a stable flow of technology products to meet consumer demands.
