Because Breaking Up is Hard to Do …
Despite disruptions created by the ongoing trade war, U.S. companies aren’t likely to completely abandon their hard-forged supply chain relationships with manufacturers in China, notes a senior fellow at Yale University.
“Clearly some components … part of the source can be pulled out of China and into other countries,” Stephen Roach said at the Morgan Stanley Asia Pacific Summit in Singapore last week. “But to take an iPhone and bring the iPhone back home – forget it, just not going to happen in a way that would provide affordable product for American users of that device.”
As reported on CNBC.com, Roach said it is obviously difficult to “uncouple” supply chains that have taken years to form. “What we see coming out of the trade conflict is trade diversion, not an unwinding of global commerce built on these multi-country supply chains,” he explained.