{"id":10001,"date":"2020-04-20T09:00:24","date_gmt":"2020-04-20T14:00:24","guid":{"rendered":"http:\/\/blog.uwsp.edu\/cps\/?p=10001"},"modified":"2020-06-03T10:43:11","modified_gmt":"2020-06-03T15:43:11","slug":"the-coronavirus-why-the-u-s-economy-will-never-be-the-same-part-3-what-will-change-supply-chains","status":"publish","type":"post","link":"https:\/\/blog.uwsp.edu\/cps\/2020\/04\/20\/the-coronavirus-why-the-u-s-economy-will-never-be-the-same-part-3-what-will-change-supply-chains\/","title":{"rendered":"The Coronavirus \u2013 Why the U.S. Economy Will Never be the Same Part 3: What Will Change &#8211; Supply Chains"},"content":{"rendered":"\n<p>The U.S.-China\nEconomic and Security Review Commission&nbsp;was created by the United States\nCongress in October 2000 with the legislative mandate to monitor and report to Congress\non the national security implications of the bilateral trade and economic\nrelationship between the United States and China. In 2019 the U.S.-China\nEconomic and Security Review Commission held a&nbsp;hearing on the growing\nreliance of the United States on China&#8217;s pharmaceutical products.&nbsp;Important\npoints from that hearing were summarized by the Council on Foreign Relations,\nan independent nonpartisan think tank that analyzes foreign policy issues. Key\npoints included:<\/p>\n\n\n\n<ul><li>Chinese\npharmaceutical firms have captured 97 percent of the U.S. market for\nantibiotics. <\/li><li>More\nthan 90 percent&nbsp;of the market for vitamin C is imported from China.<\/li><li>In\n2018, 95 percent of ibuprofen, 91 percent of hydrocortisone, 70 percent of\nacetaminophen, and 40\u201345 percent of heparin&nbsp;used in the U.S. came from\nChina, according to the U.S. Commerce Department.<\/li><li>In\naddition, many over the counter and other generic drugs sold in the U.S. are\nsourced from China, including antidepressants, HIV\/AIDS medications, birth\ncontrol pills, chemotherapy treatments, and medicines for Alzheimer\u2019s disease,\ndiabetes, epilepsy, and Parkinson\u2019s disease.&nbsp;<\/li><li>Key\ndrug imports from India&nbsp;include antibiotics, painkillers, hormones,\nantiviral drugs, and vitamins B1, B6 and B12.&nbsp;<\/li><\/ul>\n\n\n\n<p>Speaking of sourcing\nfrom China, ventilators were needed and in short supply as the coronavirus took\nhold in the United States. China became increasingly important as a supply\nsource for ventilators. China is also the world\u2019s largest producer of medical\nface masks.&nbsp; According to the BBC,\nnormally China produces around twenty million masks each day, which is estimated\nto be around half of all masks made globally.<\/p>\n\n\n\n<p>Going forward, the\nsupply chain of medical products and pharmaceuticals will likely (and should) change\nas a result of the coronavirus. The extreme dependence on China for\nantibiotics, select drugs, and medical products can be problematic on multiple\nfronts. First, heavy reliance on sourcing from a single country, no matter\nwhich country, is problematic if that supply chain is broken due to a pandemic\nor natural disaster. Second, heavy reliance on sourcing from a country which\nhas been the focus of a trade war with the United States can create problems,\nparticularly when products sourced are needed medicines and medical supplies.<\/p>\n\n\n\n<p>That being said,\nthere are reasons why the supply chains were established the way they were.\nUsually cost plays a big factor. Changing the supply chains to include more\nU.S. and near-shore sourcing could impact costs \u2013 and consequently prices. Nonetheless,\nsourcing needs to and likely will change. Multiple options for product sourcing\nand multiple country options for sourcing can lessen the probability that\ndisruptions to supply chains will occur, no matter where the next pandemic or\nnatural disaster originates. It would also provide a quicker response to any\nnational emergency where additional medical supplies were needed.<\/p>\n\n\n\n<p>For further information:<\/p>\n\n\n\n<ul><li>From the U.S.-China Economic and Security Review Commission: <a href=\"https:\/\/www.uscc.gov\/hearings\/exploring-growing-us-reliance-chinas-biotech-and-pharmaceutical-products\">Exploring the Growing U.S. Reliance on China&#8217;s Biotech and Pharmaceutical Products<\/a><\/li><li>From the Council on Foreign Relations: <a href=\"https:\/\/www.cfr.org\/in-brief\/coronavirus-disrupt-us-drug-supply-shortages-fda\">Council on Foreign Relations &#8211; Coronavirus Could Disrupt U.S. Drug Supply<\/a><\/li><\/ul>\n\n\n\n<p><em><strong>CBEI Blog Series: The Coronavirus \u2013 Why the U.S. Economy Will Never be the Same<\/strong><\/em><br><a href=\"https:\/\/blog.uwsp.edu\/cps\/2020\/04\/15\/the-coronavirus-why-the-u-s-economy-will-never-be-the-same-part-1-what-happened-a-review-of-the-economic-impacts\/\">Part 1: What Happened \u2013 A Review of the Economic Impacts<\/a><br><a href=\"http:\/\/blog.uwsp.edu\/cps\/2020\/04\/17\/the-coronavirus-why-the-u-s-economy-will-never-be-the-same-part-2-what-happened-a-review-of-the-stock-market\/\">Part 2: What Happened \u2013 A Review of the Stock Market<\/a><br><a href=\"http:\/\/blog.uwsp.edu\/cps\/2020\/04\/20\/the-coronavirus-why-the-u-s-economy-will-never-be-the-same-part-3-what-will-change-supply-chains\/\">Part 3: What Will Change \u2013 Supply Chains<\/a><br><a href=\"http:\/\/blog.uwsp.edu\/cps\/2020\/04\/22\/the-coronavirus-why-the-u-s-economy-will-never-be-the-same-part-4-what-will-change-healthcare\/\">Part 4: What Will Change \u2013 Healthcare<\/a><br><a href=\"https:\/\/blog.uwsp.edu\/cps\/2020\/05\/20\/the-coronavirus-why-the-u-s-economy-will-never-be-the-same-part-5-what-will-change-deficits-and-government-spending\/\">Part 5: What Will Change \u2013 Deficits and Government Spending<\/a><br><a href=\"https:\/\/blog.uwsp.edu\/cps\/2020\/05\/22\/the-coronavirus-why-the-u-s-economy-will-never-be-the-same-part-6-what-should-change-an-appreciation-for-service-sector-workers\/\">Part 6: What Should Change \u2013 An Appreciation for Service Sector Workers<\/a><br><a href=\"https:\/\/blog.uwsp.edu\/cps\/2020\/05\/23\/the-coronavirus-why-the-u-s-economy-will-never-be-the-same-part-7-what-should-change-securities-regulation-of-congress\/\">Part 7: What Should Change \u2013 Securities Regulation of Congress<\/a><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><a href=\"https:\/\/online.flippingbook.com\/view\/666417\/\"><img decoding=\"async\" loading=\"lazy\" src=\"http:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2020\/05\/CWERB-202005-Extra-791x1024.jpg\" alt=\"\" class=\"wp-image-10206\" width=\"198\" height=\"256\" srcset=\"https:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2020\/05\/CWERB-202005-Extra-791x1024.jpg 791w, https:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2020\/05\/CWERB-202005-Extra-232x300.jpg 232w, https:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2020\/05\/CWERB-202005-Extra-768x994.jpg 768w, https:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2020\/05\/CWERB-202005-Extra.jpg 1275w\" sizes=\"(max-width: 198px) 100vw, 198px\" \/><\/a><figcaption><a href=\"https:\/\/online.flippingbook.com\/view\/666417\/\">Download Full Report<\/a><\/figcaption><\/figure><\/div>\n\n\n\n<div class=\"wp-block-media-text alignwide is-stacked-on-mobile has-background\" style=\"background-color:#a5a4a4;grid-template-columns:32% auto\"><figure class=\"wp-block-media-text__media\"><img decoding=\"async\" loading=\"lazy\" width=\"683\" height=\"1024\" src=\"http:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2019\/11\/CPS-BusEcon-Bahr-Kevin-683x1024.jpg\" alt=\"Kevin Bahr\" class=\"wp-image-12217 size-full\" srcset=\"https:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2019\/11\/CPS-BusEcon-Bahr-Kevin-683x1024.jpg 683w, https:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2019\/11\/CPS-BusEcon-Bahr-Kevin-200x300.jpg 200w, https:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2019\/11\/CPS-BusEcon-Bahr-Kevin-768x1152.jpg 768w, https:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2019\/11\/CPS-BusEcon-Bahr-Kevin-1024x1536.jpg 1024w, https:\/\/blog.uwsp.edu\/cps\/wp-content\/uploads\/sites\/2\/2019\/11\/CPS-BusEcon-Bahr-Kevin.jpg 1200w\" sizes=\"(max-width: 683px) 100vw, 683px\" \/><\/figure><div class=\"wp-block-media-text__content\">\n<p class=\"has-black-color has-text-color\">Kevin Bahr is a professor emeritus of finance and chief analyst of the <a href=\"https:\/\/www.uwsp.edu\/business\/sentry-school-of-business-and-economics\/centers-and-outreach\/center-for-business-and-economic-insight\/\">Center for Business and Economic Insight<\/a> in the Sentry School of Business and Economics at the University of Wisconsin-Stevens Point. <\/p>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The U.S.-China Economic and Security Review Commission&nbsp;was created by the United States Congress in October 2000 with the legislative mandate to monitor and report to Congress on the national security implications of the bilateral trade and economic relationship between the United States and China. In 2019 the U.S.-China Economic and Security Review Commission held a&nbsp;hearing [&hellip;]<\/p>\n","protected":false},"author":136,"featured_media":10205,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,7,527,12],"tags":[533,124,532,305,343,344],"_links":{"self":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/10001"}],"collection":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/users\/136"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/comments?post=10001"}],"version-history":[{"count":7,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/10001\/revisions"}],"predecessor-version":[{"id":10216,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/10001\/revisions\/10216"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/media\/10205"}],"wp:attachment":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/media?parent=10001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/categories?post=10001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/tags?post=10001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}