Financial experts warn about the dependency and risks of global supply chains. Germany lost almost 40 billion euros due to delivery bottlenecks.

Financial experts warn about the dependency and risks of global supply chains. Germany lost almost 40 billion euros due to delivery bottlenecks.

According to a report by www.deutschlandfunk.de, delivery bottlenecks during the corona pandemic have led to major losses in German industry. In the manufacturing sector alone, these losses are said to be around 39 billion euros, which corresponds to around 1.2 percent of German GDP. The pandemic has shown that just-in-time production, in which inventories are minimized and goods are flexibly adapted to demand, is vulnerable to disruption. Germany, as a nation that is heavily dependent on exports, is particularly affected by these disruptions. The German export industry has benefited from global supply chains in the past and is heavily involved in globalization. Given the disruptions in international trade, there is debate about whether supply chains should be relocated to closer countries or even back home. The chief economist of the International Monetary Fund (IMF), however, emphasizes the importance of diversifying supply chains in order to increase the resilience of economies. US trade policy under President Biden continues to rely on protectionism, particularly towards China. The US has reviewed its supply chains in strategically important areas such as batteries, rare earths, medical ingredients and semiconductors and is increasingly promoting domestic production and innovation in these areas. China, on the other hand, has become a developed economy and a competitor in the high-technology market over the years. The debate over possible de-globalization has gained momentum recently as supply shortages and geopolitical strategies have come to the fore. It remains to be seen how these developments will affect the market and the financial industry.

The supply bottlenecks during the pandemic had a significant impact on German industry and led to losses of around 39 billion euros in the manufacturing sector. This shows the susceptibility of just-in-time production to disruptions. Germany, as a nation that is heavily dependent on exports, is particularly affected by these disruptions. The debate over relocating supply chains is controversial, with some favoring supply chain diversification to increase resilience while others favor protectionism. Under President Biden, the US is pursuing a protectionist trade policy, particularly towards China, while China itself is expanding its position as a high-tech country. The impact of these developments on the market and the financial industry is still uncertain, but de-globalization and geopolitical strategies have already begun to play a role. source