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The need for a reliable and diverse supply chain is essential for a stable economy. The CVD-19 pandemic exposed critical gaps in global supply chains and highlights the risks of overreliance on one “factory of the world,” which emphasizes the need to diversify U.S. supply chains. As tensions escalate across the globe, U.S. companies must weigh the geopolitical risk of future escalation between U.S.-China relations that will result in trade sanctions, increased tariffs and further interrupt transpacific supply chains routes. The myriad of challenges tied to global supply chains requires a strategic pivot of manufacturing and supply chain hubs to other competitive labor markets, closer to home.
A Western Hemisphere strategy leverages proximity access to create regional manufacturing hubs, connected to the well-established logistics ecosystems, and existing trade agreements. By restructuring global supply chains away from China and toward the Western Hemisphere, it engenders long-term national security benefits, as well as contribute to humanitarian impact all while increasing bottom-line revenue for U.S. companies.
As global companies mitigate geo-political risk, decreasing reliance on China and relocating manufacturing and supply hubs to the same hemisphere reduces their risk and postures them for the next global crisis.
Nearshoring to the Western Hemisphere creates meaningful employment, at a reduced labor-cost, while creating educated and talented pipelines in neighboring countries. With increased hemispheric development, a regional economy of scale can create a tiered manufacturing hub whereby higher tech and skilled labor employment exists in the U.S. and Mexico and labor- intense jobs that require heavy raw materials exists in Central American countries.
Sharing U.S. economic prosperity, security and human rights with our closest neighbors strengthens supply chains, safeguards regional and economic stability, all while removing global bottlenecks and expediting trade and commerce.
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