In October 2022, the US government published a set of export control rules targeting advanced semiconductors and chip manufacturing equipment destined for China. Buried in regulatory language, these rules represented something much larger: a signal that the rules governing global supply chains had changed, possibly permanently.

Most supply chain leaders I spoke to at the time had a version of the same reaction: “This is a geopolitical issue. Not a supply chain issue.” Eighteen months later, it is clearly both.

The New Normal

For most of my career in supply chain, the operating assumption was that globalisation was a one-way street. Labour costs, logistics costs, and lead times drove sourcing decisions. Politics was a background variable — present, occasionally disruptive, but rarely a strategic factor in the way that cost or quality were.

That assumption is now obsolete.

Trade restrictions, technology bans, export controls, friend-shoring incentives, and the reshoring agenda in the US and Europe have collectively created a supply chain environment in which your sourcing decisions carry political risk that simply didn’t exist fifteen years ago. The question is no longer where can I source this most cheaply? It is where can I source this without creating exposure to policy risk I cannot manage?

What the Semiconductor Case Teaches Us

The semiconductor restrictions are a useful case study because they illustrate the speed and specificity with which policy can reshape a supply chain.

Consider what happened. A company that had built its chip sourcing strategy around a set of established Chinese suppliers found, almost overnight, that some of those relationships carried legal risk. The US didn’t just impose tariffs — it created an “Unverified List” allowing selective bans on exports to specific companies, and restricted US persons from supporting Chinese chip development.

The affected companies weren’t doing anything they hadn’t been doing for years. The rules changed around them.

This pattern — the rules changing faster than supply chains can adapt — is going to be a recurring feature of the next decade. AI, biotech, rare earth minerals, and energy technology are all areas where I expect policy intervention to continue reshaping supply chain options.

The China Plus One Response

One practical response that has gained significant traction is the China Plus One strategy: maintaining operations in China while simultaneously building capacity in an alternative geography. Vietnam has been a major beneficiary, attracting significant manufacturing investment from companies in electronics, textiles, and consumer goods. Its proximity to Chinese supply ecosystems, competitive labour costs, and strong trade agreement network make it attractive.

But China Plus One is a floor, not a ceiling. The more sophisticated question is: what is my exposure matrix? For each critical category of supply, where are the geopolitical risk points, and what would it cost me to shift some percentage of that supply to a less exposed source?

This is now a boardroom conversation, not just a procurement conversation.

What Leaders Should Do

I don’t think the answer is to retreat from global supply chains. The efficiency gains from global sourcing are real, and most organisations cannot afford to simply onshore everything. But I do think three things are now essential for any leader with supply chain responsibility:

Map your geopolitical exposure. For your top twenty critical suppliers and categories, understand the political relationship between your country and theirs, and identify where regulatory change could create disruption. Most organisations haven’t done this.

Build dual-source capability for high-risk categories. Not for everything — the cost is prohibitive. But for categories where disruption would be existential, a second source in a different geography is no longer a nice-to-have.

Build scenario planning into your supply chain strategy. What does your supply chain look like if US-China trade restrictions deepen significantly? If India-China tensions escalate? If Europe introduces its own technology restrictions? These scenarios are not improbable. They should be on the planning agenda.

A Final Thought

There’s a question I put to supply chain leaders when this topic comes up: how long would it take your organisation to restructure 30% of its critical sourcing in response to a significant geopolitical shock?

Most answer: three to five years.

Most geopolitical shocks give you three to five months.

That gap is the supply chain resilience problem of our time.

Kaushik Ghatak is a supply chain strategist, educator, and advisor with over 30 years of experience across Asia Pacific and globally.