How Reliant Is the U.S. on Global Supply Chains?

In boardrooms across the country, supply chain leaders are rethinking strategies to keep operations running amid global uncertainty. The Bank of America Institute explains how geopolitics are reshaping supply chain management: “Globalization was about producing in the cheapest country—an efficiency-driven allocation of capital. Now, geo-fragmentation means it’s about producing where it’s safest—a risk management-driven allocation of capital.”

Alongside geopolitical tensions, emerging cutting edge technologies like artificial intelligence are driving unprecedented demand for electricity and advanced data center infrastructure, adding a new layer of supply chain pressures and complexity to resilience planning.

Federal initiatives, legislation, and infrastructure funding have aimed to reshore manufacturing, secure critical supply chains, and incentivize domestic production. These efforts reflect a bipartisan recognition of the economic and national security risks created by global supply chain disruptions.

Identifying Supply Chain Risks

The 2021–2024 Quadrennial Supply Chain Review identified key sectors that the U.S. must strengthen to reduce dependence on foreign suppliers. These sectors include energy, food and agriculture (production and distribution), public health, information and communications technology, defense, transportation, advanced batteries, pharmaceutical ingredients and semiconductors.

Reshoring or nearshoring manufacturing facilities for these critical sectors is important for domestic resilience and global competitiveness. Respondents to the NFTC 2025 Supply Chain Survey asked for investment incentives and workforce training to support U.S. competitiveness.

Federal programs like FDA PreCheck for pharmaceuticals, the CHIPS and Science Act for semiconductors, and tax incentives for renewable energy are focused on strengthening critical domestic industries. These efforts underscore a growing partnership between government and the private sector aimed at reducing logistics costs and improving resilience.

Strengthening Supply Chain Resilience

Significant investments are being made in increasing U.S. manufacturing in critical sectors. Intel is spending $32 billion to expand chip production, and TSMC and Texas Instruments are also expanding U.S. facilities.

As part of broad efforts to enhance supply chain resilience and competitiveness, the federal AI Action Plan is streamlining permitting and supporting the build-out of critical infrastructure like data centers and semiconductor facilities. These investments address the rising demand driven by AI technologies, which require substantial computing power and energy resources. By fostering advancements in AI infrastructure alongside traditional manufacturing, the U.S. aims to ensure future supply chains can leverage machine learning and advanced technology while managing their operational risks.

Many sectors still face significant hurdles. Automotive vehicles, parts and engines are heavily reliant on complex global supply chains.  Pharmaceutical manufacturing continues to depend heavily on foreign active pharmaceutical ingredients, and agriculture relies on imported fertilizers.

With a mix of targeted federal backing, private investment, and flexible planning, the U.S. is making steady progress toward increased resiliency in supply chains. However, reshoring is complex and supply chains are interconnected. For example, tariffs on imported steel and aluminum raised can supply chain costs, which prompted canned food makers to adjust.

Looking at Supply Chain Trends 2025 and the Road Ahead

Reducing the difference between U.S. imports and exports will help rebalance the trade deficit; however, trade policies alone may not be completely effective at deglobalizing supply chains.

Federal Reserve research shows that while tariffs may bring in revenue, they can also lead to economic losses both in the U.S. and globally. Reduced imports mean lower tariff income, making the overall economic impact difficult to predict.

The economic impact of the increased U.S. effort to nationalize supply chains can be measured by monitoring GDP, employment, trade volume, and inflation. Real gross domestic product (GDP) increased at an annual rate of 3.3 percent in the second quarter of 2025 (April, May, and June), in contrast to the first quarter, when real GDP decreased 0.5 percent. However, the BEA U.S. International Trade in Goods and Services update for July 2025 showed that year-to-date, the goods and services deficit increased $154.3 billion, or 30.9 percent, from the same period in 2024. Exports increased $103.1 billion or 5.5 percent. Imports increased $257.5 billion or 10.9 percent.

According to the July 2025 World Economic Outlook update, global inflation continues to decline, but price data suggest that inflation pressures are building gradually in the U.S.

Employment projections for 2024-2025 from the Bureau of Labor Statistics report that the U.S. economy is projected to add 5.2 million jobs from 2024 to 2034, with large growth in healthcare and social assistance, and in the technical services and information sector. However, advancements in automation will continue to reduce demand for production occupations.

According to the 2025 Reshoring Survey Report, rebuilding the U.S. manufacturing base will require investments in automation, training, and education to improve operational efficiency, support cost reduction, and adopt innovative strategies that mitigate risks across industries. Organizations that use scenario planning to anticipate disruptions and align key trends with their long-term goals are more likely to achieve positive business outcomes while maintaining the flexibility to control costs.

Moving Forward

The U.S. remains deeply reliant on global supply chains, but bipartisan actions have pushed resilience to the top of the national agenda, so U.S. supply chain operations are diversifying. For companies planning new facilities or expanding production, success will depend on building resilient, flexible infrastructure that can adapt to changing costs, policies, and global conditions.