During the first quarter of 2020, factories that manufactured high-quality products for the US were shut down in China due to the COVID-19 pandemic. This move led to the realization that such supply chains can be harmful. Many US leaders, including the president, brought attention to domestic manufacturing and floated the idea of cutting out international supply chains. In opposition to this, other US leaders said that the country cannot manufacture everything it needs. In any case, many think it is possible and might even be good if isolation is the key to staying safe. This article looks at the reasons why such a change could end in security issues.
The Major Risks of a Manufacturing Resurgence
Some US leaders have discussed how this manufacturing resurgence could prove to be beneficial in the long run, but in the short run, it might cause more harm to domestic businesses.
These leaders claim that, primarily, it is complicated to shift everything back into the US for domestic manufacturing. Secondly, they argue, domestic suppliers will be the ones to provide the necessary and required items, and their own domestic business might face a significant loss because of this sudden transition.
A consequence that might arise due to such a shift in manufacturing is that other global manufacturers will make efforts to reduce the manufacturing output from the US. According to many business leaders, this action could lead to the disruption of domestic business.
According to the VP of Huawei Technologies, any talks of shifting manufacturing to the US will not bear any fruits.
Domestic Manufacturing and Medicine
The manufacturing of appliances and other electronic products, if delayed, will not affect citizens much. The problem lies in the fact that China produces more than 85% of the available medicines in the US. If the manufacturing of the medicinal products is delayed even for a little bit, it can result in critical issues.
Manufacturing medicine also requires specialized employees and equipment, two things which the US does not currently possess on a large scale.
Domestic Manufacturing and Raised Prices
China has always manufactured goods for a lower price. If the US were to shift the manufacturing back to make it domestic, the issue that rises is that it will lead to an increase in the prices of the goods as the US in comparison is not as efficient in mass manufacturing currently.
This increase in the prices of goods will be borne by citizens who will then be required to pay a larger amount for a product that they previously purchased for a much lower price.
Domestic Manufacturing & Cyber Breaches
While the US manufacturers have solid IPs for manufacturing goods, it is a well-known fact that the manufacturing industry is often susceptible to cyber breaches. Most manufacturers do not have any reliable measures to prevent that from happening.
According to many experts and leaders, this means that domestic manufacturing has a lot of vulnerabilities. Furthermore, shifting product production might not be a good idea for the US because that will require drastic changes in the way the domestic businesses operate.
Serious Security Issues
If this massive manufacturing shift were to take place, what are the implications for cybersecurity concerns? Joseph Neumann, Director of Offensive Security at Coalfire, expressed concern about stolen intellectual property and compromised products.
He warns, "Making the shift to onshore production will lower security risk in the end but have a short term risk due to bringing everything back into the US."
The opinions on this subject vary significantly, and it can be challenging to separate opinion from a vested interest in most cases.
While the current government has adopted the mantra of “America first,” it is far from simple to make a clear case either way to how beneficial these changes would be for US businesses.
Avi Ben Ezra is the Chief Technology Officer (CTO) and Cofounder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.