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Rebalancing Trade with China Requires a More Diverse Electronics Supply Chain
Chinese chip manufacturing has attracted much attention in the West, but Beijing’s industrial policy has also placed it in the lead of other electronics component manufacturing. The West risks overdependence on Chinese-made displays, printed circuit boards, and assembly capabilities.
China is regularly weaponizing its position in supply chains. Due to the complexity of electronics manufacturing and China’s growth into higher-value segments, it is crucial that the US work to diversify the world’s electronics manufacturing.
To secure a supply of critical components in the event of a crisis, US policymakers should encourage manufacturing and assembly in allied countries, consider tariffs on Chinese components in final goods imported from third countries, and build up defense electronics manufacturing.
China is regularly weaponizing its position in supply chains. Due to the complexity of electronics manufacturing and China’s growth into higher-value segments, it is crucial that the US work to diversify the world’s electronics manufacturing.
To secure a supply of critical components in the event of a crisis, US policymakers should encourage manufacturing and assembly in allied countries, consider tariffs on Chinese components in final goods imported from third countries, and build up defense electronics manufacturing.
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