In a speech in South Korea on Tuesday, Treasury Secretary Janet Yellen pushed the idea of "friend-shoring" as economic policy. Broadly speaking, the new-ish term refers to the idea of trading more closely with allies instead of "geopolitical rivals," as the Wall Street Journal puts it. For the latter camp, think China especially, but also Russia. The Journal sees this "proposed paradigm shift" as a "reorientation of the world's trading practices." Coverage:
- Her words: “Friend-shoring is about deepening relationships and diversifying our supply chains with a greater number of trusted trading partners," said Yellen. "The purpose is to lower risks for our economy and theirs." She added: “We cannot allow countries like China to use their market position in key raw materials, technologies, or products to disrupt our economy or exercise unwanted geopolitical leverage."
- The term: CNBC explains that "friend-shoring" is an offshoot of "on-shoring" and "near-shoring," both of which "refer to the transferring of supply chains back home or closer to home, as opposed to having them in foreign countries." Friend-shoring "goes beyond that but limits supply chain networks to allies and friendly countries." They're all twists on the older concept of "off-shoring," in which companies moved operations to cheaper locales abroad, writes Bryce Baschuk in an analysis in the Washington Post.