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Wednesday, July 24, 2024

Tapping the U.S. friendshoring strategy

By Huynh The Du

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Vietnam and the U.S. have formally elevated their bilateral relationship to a comprehensive strategic partnership (CSP), thus creating a great opportunity for Vietnam to make good use of the U.S. friendshoring policy and become a high-income country by 2045 Friendshoring and related policies Friendshoring is a newly-coined term. It refers to multinational corporations redirecting their supply chains to countries with economic and political stability or low economic and political risks to avoid disruptions to their business. Besides friendshoring, other relevant terms include nearshoring, inshoring, onshoring and reshoring. Nearshoring means transferring business operations to a nearby country, especially countries with a joint borderline. Recently, the U.S., Canada and Mexico have replaced their long-established North American Free Trade Agreement (NAFTA) by a new trade pact as part of this strategy. Meanwhile, inshoring, onshoring and reshoring refer to enterprises moving their business operations back to their countries. These policies were formulated amidst the trade war between the U.S. and China, and now the Second Cold War. The Covid-19 pandemic forced many countries to close their borders and disrupted supply chains, affecting many countries especially the U.S. New risks surfaced when Russia attacked Ukraine, and the U.S. and many other developed countries began the […]
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