The Global Supply Chain Landscape Is Being Reorganized

As US-China conflict intensifies and the "de-China" trend accelerates, with US and EU-centered reshoring strategies becoming full-scale, Korean manufacturing is being pushed into a "blind spot" caught in between. Reshoring means the process of returning production processes moved overseas back to the home country -- the phenomenon of companies re-transferring overseas production back to the home country is increasing, mainly due to global supply chain instability or cost reduction. Amid these global flows, Korean manufacturing is facing a crisis. Companies that once played a central role in Korean export industries face the "three highs (高)" of high interest rates, high exchange rates, and high tariffs -- squeezed between China (low-cost manufacturing) and the US/EU (high-tech manufacturing with reshoring incentives). The blind spot mechanism: Korea manufacturing companies are too expensive for the pure cost competition with Chinese manufacturers; but they lack the domestic market scale and government subsidy levels of US/EU reshoring incentives to justify the premium; Chinese customers are diversifying away from Korean suppliers as China develops domestic alternatives; US customers are being incentivized by IRA and CHIPS Act to source domestically rather than from Korea; the result is Korean manufacturers losing both the low-cost market they previously competed in and facing barriers to the premium market they aspire to enter. The sectors most affected: petrochemicals (Chinese overcapacity crushing prices); steel (Chinese dumping + US Section 232 tariffs creating margin compression); consumer electronics components (Chinese alternatives developed, US reshoring incentivized); the strategic industries Korea once dominated are under simultaneous pressure from multiple directions. Policy response options: Korea government bilateral trade agreements that provide preferential access to US and EU markets; investment in moving up the value chain to products where Chinese alternatives do not yet exist; strategic manufacturing partnerships with ASEAN countries to access their preferential trade relationships; the time horizon for these responses is 5-10 years while the market pressure is immediate.