Trade policies meant to secure supply chains actually make them more global

New research shows that policies designed to bring supply chains closer to home, like "Friendshoring" and "Country Plus One," actually increase the number of international trade links. This means more complexity and higher transaction costs for companies trying to build electric vehicles.

Governments are trying to make supply chains more resilient by encouraging companies to work with allies or build redundant systems. But it turns out, these policies can have the opposite effect, spreading risk rather than concentrating it. This paper suggests that the push for national security in trade might inadvertently create more global entanglement.