US Secretary of the Treasury for Supply Chain Resilience: Use Friend Support

US Treasury Secretary Janet Yellen has reiterated the need for the US and its trusted trading partners to increase the supply chain̵[ads1]7;s resilience through “friend support”, but said this does not mean the US is withdrawing from the rest of the world.

In a speech at the South Korean conglomerate LG’s Science Park in Seoul on Tuesday, Yellen drummed up support from US allies to work together to build more robust supply chains among trusted partners through “friend support”.

The term draws on the terms “onshoring” and “nearshoring”, which refer to the transfer of supply chains home or closer to home, as opposed to having them in foreign countries. “Friend-shoring” goes beyond that, but limits supply chain networks to allied and friendly countries.

The United States has been pushing for more security in its supply chains since the pandemic began. In early 2021, US President Joe Biden signed an order to review US supply chains with a goal of reducing dependence on foreign suppliers.

“The resilience of supply chains is a key focus of the Biden-Harris administration. And the need for this work has been clearly illustrated by the events of the last two years, first by Covid-19 and our efforts to combat the pandemic and now by Russia’s brutal war of aggression in Ukraine. , “said Yellen.

“Together, they have drawn the contours of global supply chains and trade.”

“Working with allies and partners through peer support is an important element in strengthening economic resilience while maintaining the dynamism and productivity growth that comes with economic integration.”

However, these initiatives have raised concerns about global economic decoupling, especially as the United States and other countries seek to avoid overdependence on China.

Yellen said that these measures do not indicate that the United States is withdrawing from global trade. Rather, she said, they show that friendly countries take a long-term perspective on vulnerabilities in an effort to make economies more productive.

“We do not want a refuge from the world, which causes us to give up the benefits it brings to the American people and the markets for business and exports,” Yellen said, referring to deeper ties with South Korea.

“By doing this, we can help isolate both US and Korean households from price increases and disturbances caused by geopolitical and economic risks… in that sense, we can continue to strengthen the international system we have all benefited from, while protecting ourselves. from the fragility of global trade networks. “

Resilience in the supply chain dominated this part of Yellen’s visit to Asia, which followed last week’s trip to Bali for a group of 20 meetings.

South Korea’s LG also confirmed its latest US collaboration, a $ 1.7 billion expansion of lithium-ion batteries in Michigan, while Yellen outlined Hyundai’s electric vehicle and battery production facilities in Georgia and Samsung’s semiconductor chip factory in Texas.

Other initiatives that support the resistance chain’s efforts include the recently announced economic framework for the Indo-Pacific, Yellen added.

“With ‘friend support’, South Korea and the United States are in an ideal location,” James Kim, chairman of AmCham in South Korea, told CNBC’s Capital Connection.

“This is the most exciting phase I have seen in the last 18 years.”

Kim said that although there were more direct South Korean investments in the US than vice versa, US interests are growing in the Asian country.

A recent study by AmCham shows that South Korea ranks for the first time as the second most attractive place for regional headquarters in Asia, after Singapore, says Kim.