The Research Institute of Economy, Trade and Industry published "Supply Chain Challenges: Recognizing the 'Historical Turning Point'" analyzing challenges facing global supply chains and the need for long-term responses.
Facing drastic tariff increases and threats from the second Trump administration, the report emphasizes the importance of long-term responses that consider hard-to-grasp trend changes, not just immediate issue responses. Analysis of trade structures among Japan, US, and China shows Japan's exports have shifted to a parts and capital goods-centered structure, while Chinese exports to both Japan and the US account for approximately half when combining parts and capital goods.
Key insights include:
- Structural shifts in trilateral trade relationships
- Challenges in substituting specialized, differentiated products
- Need for supply chain diversification strategies
- Importance of maintaining technological competitiveness
The report argues that because these goods are differentiated and suited for specific applications, substitution is difficult, making domestic switching due to tariff increases challenging to achieve quickly. Long-term strategies must focus on building resilient, diversified supply chains while maintaining competitive advantages in high-value components and capital goods.