‘Derisking’ China-Reliant Supply Chains Is Creating New Risks

“Derisking” the West’s ties with China—shorthand for measures like tariffs to build up supply chains in friendly nations—has a nice ring to it. After all, who could argue against reducing risks?

Sometimes, however, the way economic concepts are framed can be misleading. New research is shedding light on how “derisking” is actually playing out. The preliminary conclusions are concerning: Much of the resiliency that supply-chain measures are designed to create may be illusory. Moreover, more-complicated global supply chains are creating new risks, which policymakers might not fully appreciate.