Global Supply Chain Crisis: Tri-Nation Partnership Takes a Stand

The United States, South Korea, and Japan have declared their intention to counteract the supply chain crisis caused by China’s overproduction and low-cost dumping in the electric vehicle and solar panel industries, among others, through a Reinforcing and Improving Sustainable Economies (RISE) partnership.

On the 17th (local time), Choi Sang Mok, the Deputy Prime Minister and Minister of Economy and Finance in South Korea, U.S. Treasury Secretary Janet Yellen, and Japanese Finance Minister Shunichi Suzuki held a meeting in Washington, D.C., where they adopted a joint statement for the first time containing these details.

This meeting, a follow-up to the tripartite summit held at Camp David in the United States last August, served as a platform for the finance ministers of the three countries to discuss the changing economic and financial situations.

While the U.S. did not explicitly mention China, it effectively put China’s overproduction issue on the agenda.

Earlier, Secretary Yellen, during her visit to China from the 4th to the 8th, warned that “the overproduction of Chinese products in areas such as electric vehicles, solar panels, and clean energy is unacceptable.” U.S. Trade Representative Katherine Tai, appearing at a U.S. House Ways and Means Committee hearing on the 16th, pointed out, “China’s unfair policies and practices have devastated many labor communities and industries across the United States.”

The finance ministers of the three countries included in their joint statement, “We emphasize the importance of cooperation to overcome the damage that the vulnerability of supply chains, economic coercion in key sectors, and other non-market economic practices of other countries can inflict on our economy. We reaffirm the leaders’ agreement on fundraising to enhance supply chain resilience and will work together through the RISE partnership to achieve this.”

RISE is a cooperative body launched in November last year, led by the Group of Seven (G7) and the World Bank (WB), to expand the role of middle- and low-income countries in the entire clean energy supply chain, providing growth opportunities and strengthening global supply chain resilience. It aims to reduce dependence concentrated on specific countries like China throughout the whole supply chain, from mineral mining to processing and manufacturing.

South Korea has pledged $3 million (USD) to RISE. Through regional and international supply chain consultation bodies, it plans to stabilize core industries and major mineral supply chains such as steel, aluminum, solar panels, batteries, and electric vehicles.

Deputy Prime Minister Choi said, “We need to strategically respond through close dialogue and solidarity among the three countries against disruptions in the supply chain caused by factors threatening stable trade and economic order.”