Some companies and governments have pursued friendshoring as a means to continue accessing international markets and supply chains while reducing geopolitical risks.
Bonnie Glick first used the term "allied shoring" at the start of the COVID-19 pandemic while she was serving as the Deputy Administrator of the United States Agency for International Development.
[1] In April 2022, Treasury Secretary Janet Yellen used the term "friend-shoring" in one of her speeches,[2] and the White House mentioned "ally and friendshoring" in a June 2022 report on resilient supply chains.
[3] One of the effects of this shift has been an increase in trade with Mexico which, in 2023, replaced China as the biggest producer of goods exported to the United States.
[4] Friendshoring can help mitigate supply chain risk stemming from geopolitical tensions with countries which exert full control over the flow of important materials.
[7] Raghuram Rajan, former governor of the Reserve Bank of India, is critical of friendshoring, voicing concerns about its impact on global free and fair trade.
[10] Specifically, it estimates that trade barriers associated with friendshoring could lead to a 2% decrease in global economic output, an impact that would spread unevenly across different countries.
[9] Some argue that moving business out of a non-allied country due to a lack of shared values doesn't necessarily always reap the benefits of risk mitigation, supply chain resiliency, and/or reliability.