Analysis and Studies - Studies

What is “Friendshoring”?

When manufacturing products, companies usually implement supply chain strategies to be more efficient, elastic, and to save money.

There are many trade practices which are commonly known by the experts. While “onshoring”, “reshoring”, and “nearshoring” have been circulating for years, “friendshoring” has emerged lately, representing the relocation of supply chains to “allied” countries where there is a lower risk of disruption from political and economic disorder.

Recent years have shown us the power of global shocks, such as the Covid-19 pandemic or the invasion of Russia in Ukraine, in negatively affect the economy. Events of such great scope can create chaos for companies, and this is why it can feel necessary to mostly cooperate with “friendly” countries which share similar norms and values.

Despite increasing security in the production, some experts are afraid that friendshoring could boost geo-political fragmentation and deglobalization. As countries with common values usually have a similar level of development, their collaboration would leave the poorest countries behind, depriving these ones of the economic and social advantages that they could gain. This could result in increasing production costs and consumer prices.

Learn more on friendshoring and other trade buzzwords on the World Economic Forum’s website and on The New York Times.