Read: the article from Scribd: Where's my stuff? discuss and answer the following question: Do you believe that the current global supply chain crisis will be better or worst in the upcoming months? Yes or No. Defend your answer.

DANIEL W. DREZNER AMERICANS CAN BE forgiven for thinking that every critical system we rely on is breaking down. The countrynay, the globehas endured years of social, political, environmental, and epidemiological upheaval. Pick your shock: COVID- 19, wildfires, George Floyd protests, climate change, January 6. They all seem like harbingers of a chaotic future. But backlogs in Pottery Barn orders are when this gets real. From Bosch dishwashers to bucatini to chicken wings to pipette tips, the past year has seen a ra of press coverage about delays, price spikes, and other disruptions to the production and shipment of goods to the United States. Strains in the global supply chain caused semiconductor shortages and big price increases for used cars. Toyota, Ford, and General Motors have all scaled back production in recent months because of the dearth of computer chips. When the container ship Ever Given temporarily ran aground in the Suez Canal, the Financial Times asserted that the accident showed the inherent fragility of tightly stretched global supply chains at the very moment when they are already being bueted by a pandemic and in an era when the philosophical underpinnings of global trade are being challenged.

departments examine the resilience of U.S. supply chains, warning that pandemics and other biological threats, cyber-attacks, climate shocks and extreme weather events, terrorist attacks, geopolitical and eco- nomic competition, and other conditions can reduce critical manufacturing capacity and the availability and integrity of critical goods, products, and services. More recently, Biden has floated multiple policy responses, including using the National Guard to untangle snarled supply chains. The administrations concern about global supply chains fits in with the political elites larger ideological pivot away from trade liberalization and toward a more mercantilist posture. Indeed, this is the area where the Biden and Trump administrations sound the most similar. Bidens U.S. trade representative, Katherine Tai, stated in a congressional hearing that trade liberalization and tari reductions were no longer her oices principal goals. In June, Bidens National Economic Council director, Brian Deese, declared that resilient supply chains must be at the center of a 21st century industrial strategy. One of Bidens senior directors at the National Security Council has told me that the U.S. is not a trade- dependent nation. Another administration oicial questioned to me whether the notion of comparative advantage in trade still exists. Never one to be outdone in policy freakouts, Sen. Josh Hawley (RMo.) has introduced a bill requiring more than half the value-added of any critical good to be domestically sourced. The recent convulsions in global supply chains do highlight ways the globalization of the past decade diers from the idealized models taught in introductory economics courses. Globalization has produced far more market concentration than would have been expected a generation ago. The tripling of the Baltic Dry

the past year demonstrate that frictionless markets do not exist. Rising geopolitical tensions between the United States and China reveal the ways that great power competition will complicate cross-border exchange. And the pandemic showed how the global economy can be bueted by shocks that textbooks typically do not discuss. A closer look at global value chains reveals ways that both public-sector and private-sector actors have prioritized short-term eiciency at the expense of long- term resilience. But it also reveals a mismatch between a lot of overheated political rhetoric and an actual understanding of how the global economy works. Many of the past years issues are temporaryand when it comes to strained global supply chains, globalization is more oen the solution than the problem. WHEN FORD COMPLETED its massive River Rouge plant in 1928, it created a factory that controlled every facet of car production, including its own steel mill. Trade volume was high during this era, but very few intermediate goods crossed borders. In the time since then, the industrial organization of production has changed a wee bit. Whereas trade a century ago was primarily in finished goods, manufacturing now has disaggregated itself into myriad chains of subcontractors. As one MIT Sloan Management Review article summarized the phenomenon, we have a deeper tiering of supply chains whereby suppliers draw upon their suppliers who in turn draw on their own networks of suppliers in multistage production networks. Why did this happen? The end of the Cold War eliminated most geopolitical concerns about where to locate production facilities. Basic trade theory meant an

The most widely cited example of the globalized supply chain is Apples iPhone. Most people know that the iPhone is manufactured in China and exported to the United States. What is less well known is that China plays only a minor role in the creation of its added value. The iPhones flash drive comes from the Japanese firm Toshiba. Samsung, a South Korean firm, provides the application processor. A German company provides the camera module, and a U.S. subcontractor provides the Bluetooth application. All of these parts are then assembled by a Taiwanese firm, Foxconn, with operations in Shenzhen, China. The management consultants were right about the eiciency. While productivity in the service sector stagnated aer the turn of the century, manufacturing productivity continued to soar. The political economy advantages were also apparent aer the collapse of Lehman Brothers. The last time a financial shock of that magnitude hit, the trade wars of the Great Depression began. 2008 was dierent. A World Bank study examined trade restrictions immediately aer 2008 and found that vertical specialization was the most powerful economic factor that limited tari increases. The more a countrys economy was enmeshed in global supply chains, the less likely it was to raise barriers to trade. Global supply chains help explain

So these global value chains seemed like an unalloyed good. And then the 2010s happened. AS GLOBAL SUPPLY chains grew more and more complex, there were signs of trouble on the horizon. In 2011, the Chao Phraya River floods in Thailand severely but temporarily constricted production of hard disk drives, because close to half of global output was sourced from Thailand. In 2017, U.S. hospitals faced an acute shortage of IV bags aer Hurricane Maria knocked out a key production facility in Puerto Rico. The 2011 earthquake and tsunami that hit Fukushima in Japan aected key nodes in global manufacturing. Some firms suspended sales of cars in certain colors because key ingredients were stored near Fukushima and inaccessible. An iPhone designer warned The New York Times that there are all kinds of little specialized parts without second sources, like connectors, speakers, microphones, batteries and sensors that dont get the love they deserve. Many are from Japan. These supply chain hiccups highlighted one underanticipated phenomenon of globalization: Rather than strengthen market competition, it strengthened market concentration. Consumer-facing firms from Walmart to Ford to Apple to Home Depot stressed cost minimization ubr alles. Firms that excelled at eiciently producing one part became near-monopolists for that component. This is how Taiwan Semiconductor Manufacturing Company (TSMC) became the dominant global supplier of customized semiconductor chips. Other chipmakers focused on design, subcontracting to the Taiwanese firm for the physical.

All of the evidence of the past year suggests that globalization helps economies recover more quickly from supply chain diiculties than aggressive eorts at homeshoring. This is because most shocks are localized, and access to global value chains facilitates recovery more quickly. Indeed, protectionism is partly to blame for the current mess. As the Cato Institutes Scott Lincicome recently noted, the Jones Act, which mandates use of U.S.-built, crewed, and flagged ships to move cargo from one U.S. port to another, has raised the costs of coastwise shipping, putting even more pressure on truck and train transport. Unsurprisingly, U.S. producers seeking relief from skyrocketing shipping rates have asked the Biden administration to reduce taris. Protectionism isnt the solution to these breakdowns in our supply chains; its part of the problem. DANIEL W. DREZNER, a professor of international politics at the Fletcher School at Tus University, is the co-editor of The Uses and Abuses of Weaponized Interdependence (Brookings). Photo: George Tsartsianidis/iStock Protectionism isnt the solution; its part of the problem.