You see, those cleaning products that we all love so much are part of a vast supply chain, most of which originates in China. Indeed, the raw chemicals needed to make Lysol or Clorox are manufactured in China and then shipped to the U.S. Given the breakdown in our global supply chain associated with the coronavirus, many of those factories overseas were shut down, and the U.S. was unable to receive its regular shipments of goods from China... hence the run on cleaning agents. You’ve got to wonder... As a developed nation, why are we allowing ourselves to be so dependent on foreign countries that we can’t even keep Lysol or Clorox wipes on store shelves in the midst of a viral pandemic? As a developed nation, why are we allowing ourselves to be so dependent on foreign countries that we can’t even keep Lysol or Clorox wipes on store shelves in the midst of a viral pandemic? Meanwhile, it’s not just chemicals . Remember last year when we couldn’t get ventilators or masks? Or how about the semiconductor chips embedded in our televisions, phones, cars, and all other electronic devices? The semiconductor supply issue began in early 2020, and as we approach the final three months of 2021, it’s still plaguing the industry. MADE IN THE USA
THE COMPUTER CHIPS THAT POWER THEWORLD ARE MOSTLY MADE IN ASIA The heart of the issue is that we don’t manufacture these critical semiconductors here at home. Rather, 75% of theworld’s semiconductors are currently made in Asia. So when semiconductor factories in Asia were forced to shutter due to the coronavirus, the ripple effects were felt around the world. Suddenly, car and electronic manufacturers didn’t have chips. A backlog began and swelled, resulting in increased prices on many electronics... and a major shortage of chips. In fact, our overdependence on Asia for these semiconductor chips (and just about everything else) is partly what’s fueling the current inflation in our economy, with producer prices increasing at a record rate of 7.8% and consumer prices jumping 5.4%... and still climbing. Granted, the Fed’s money printing and Congress’ spending certainly are contributing to inflation as well, but our outsourcing of products is a big part of the problem, too. Amid the ever-increasing demand for tech products tied to this new work-from-home culture, and with the inability to secure components, U.S. companies are losing out on business opportunities while consumers get stuck paying higher and higher prices. It’s a lose-lose for America and American businesses. But maybe not for long...
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September 2021
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