Global Supply Chain Restructuring During the COVID-19 Pandemic

This paper uses transaction-level import data at the shipment level to examine how multinational companies importing to the US have restructured their supply chains during the COVID-19 pandemic. We find that companies sourced from fewer locations, reduced the share of imports from China, and increased the share of imports from other Asian countries, such as India and Vietnam, and North American countries, such as Canada and Mexico. We also observe a shift towards lower frequency, higher quantity shipments during the pandemic. However, the specific responses depend on industry and product characteristics. While the sourcing of commoditized consumer goods shifts towards lower-cost countries, "critical" goods such as medical products and semiconductor materials are increasingly sourced from the Americas. The effects are partially moderated by the number of COVID-19 cases in supplier countries. For managers, our results imply that a one-size-fits-all mentality regarding supply chain disruption responses is not appropriate, and companies' disruption-response strategies need to be tailored to individual supply chains' circumstances.