Hidden Exposure: Measuring U.S. Supply Chain Reliance

Richard Baldwin, Rebecca Freeman, Angelos Theodorakopoulos

Research output: Contribution to journalConference articlepeer-review


Supply chain problems, previously relegated to specialized journals, now appear in G7 Leaders’ Communiqués. Our paper looks at three core elements of the problems: measurement of the links that expose supply chains to disruptions, the nature of the shocks that cause the disruptions, and the criteria for policy to mitigate the impact of disruptions. Utilizing global input-output data, we show that U.S. exposure to foreign suppliers, and particularly to China, is ‘hidden’ in the sense that it is much larger than what conventional trade data suggest. However, at the macro level, exposure remains relatively modest, given that over 80% of U.S. industrial inputs are sourced domestically. We argue that many recent shocks to supply chains have been systemic rather than idiosyncratic. Moreover, systemic shocks are likely to arise from climate change, geoeconomic tensions, and digital disruptions. Our principal conclusion is that concerns regarding supply chain disruptions, and policies to address them, should focus on individual products, rather than the whole manufacturing sector.
Original languageEnglish
JournalBrookings Papers on Economic Activity
Publication statusAccepted/In press - 5 Nov 2023
EventBrookings Papers on Economic Activity Fall 2023 Conference -
Duration: 28 Sept 202329 Sept 2023

Bibliographical note

Copyright © 2023, The Brookings Institution. This is an earlier version of the paper prepared for the Fall 2023 Brookings Papers on Economic Activity (BPEA) conference and the final version of this paper will be published in the Fall 2023 BPEA issue.


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