As the COVID-19 pandemic eases and economies emerge from suspended animation, demand for energy, labor and transport has surged. That sudden acceleration is putting a huge strain on the just-in-time, cross-border supply chains that keep factories open and shelves stocked. From Liverpool to Los Angeles, Beijing to Berlin, the world is in the grip of a supply crunch.
In the US, with the holiday season approaching, companies are predicting shortages and price rises for everything from artificial Christmas trees and sports goods to Thanksgiving turkeys. Retailers warn that basics including toilet paper could once again be in short supply.
With coronavirus still a big threat in many of the countries the US relies on for goods, the crisis looks set to continue for some time. “It is frustrating to acknowledge that getting people vaccinated and getting Delta under control, 18 months later, still remains the most important economic policy that we have,” the Federal Reserve chair, Jerome Powell, said. “It is also frustrating to see the bottlenecks and supply chain problems not getting better – in fact, at the margin, apparently getting a little bit worse.”
Some experts predict 80% of the US will be vaccinated against COVID-19 by the end of the year, but the pandemic’s impact will last far longer than that as the broken links in the global supply chain continue to drag down the economy.
The shortage has prompted renewed action by US policymakers to identify ways to strengthen the US industry and workforce. For instance, on March 15, 2021, the US Commerce Department’s Bureau of Industry and Security (BIS) launched a review to conduct a comprehensive assessment of, and identify ways to strengthen, key US industries deemed essential to US economic and national security, including semiconductors, advanced batteries, critical minerals, and pharmaceuticals.