If global supply chains from Asia were suddenly disrupted, we would face a severe economic crisis characterized by widespread shortages, rising inflation, and significant production shutdowns. No, most nations are not ready for a major, sustained disruption, as the COVID-19 pandemic and other events have shown.

The Immediate Fallout of a Disruption

• Widespread Shortages: A sudden disruption would immediately affect the availability of a vast array of goods, from consumer electronics and clothing to essential medical supplies and industrial components. Many industries rely on a "just-in-time" inventory model, which means they have very little stock on hand. This would cause store shelves to empty and manufacturing lines to halt very quickly.

• Inflation: As supply collapses and demand remains high, prices for available goods would skyrocket. This supply-side inflation would impact everything, making even domestically produced goods more expensive due to shortages of imported components. This could trigger a severe and rapid increase in the cost of living.

• Economic Stagnation: The lack of critical inputs would cripple domestic industries. Without the parts and materials to produce finished goods, companies would be forced to slow down or even stop production, leading to mass layoffs and a sharp decline in economic activity. This combination of high inflation and low economic output is a recipe for stagflation.

Are We Ready?

Based on recent global events, the answer is no. While some countries have taken steps to increase their resilience, a major disruption would still be catastrophic.

• Lack of Strategic Reserves: Unlike some commodities like oil, most nations do not have large strategic reserves of consumer goods, electronics, or industrial parts. While there's a growing push to create these, they are expensive and complex to maintain.

• Dependence on a Few Producers: The global economy is built on a few highly concentrated supply chains, with a heavy reliance on a handful of countries for critical goods like semiconductors. This concentration creates a single point of failure. While some companies are now "near-shoring" production, this process is slow and costly.

• Fragile Infrastructure: The global shipping and logistics infrastructure is already stretched thin. Congested ports and a shortage of shipping containers and drivers during the pandemic highlighted the fragility of our transport networks. A major shock could cause a complete breakdown of the system.

The long-term solution lies not just in holding reserves, but in reshoring or near-shoring critical industries, diversifying supply chains, and investing in local manufacturing capacity. This would make economies more resilient and less susceptible to the geopolitical and economic whims of a few dominant global players.