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4/22, 3:16 PM (Source: TeleTrader)
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Global supply chains 'extremely vulnerable' - Lagarde

European Central Bank (ECB) Christine Lagarde shared on Friday, speaking at an event organized by the Peterson Institute for International Economics, that although the global supply chains "have become progressively leaner and more efficient through 'just-in-time' production, they have also become extremely vulnerable to disruptions in the face of global shocks that affect multiple sectors at once."

Lagarde underlined that "it has become clear how much global production relies on critical raw materials sourced from just a few countries," adding that such an arrangement "can quickly become a vulnerability when geopolitics change." She said that the result of the conflict between Russia and Ukraine has led to a disruption of supply chains "given their low potential for diversification and substitution inside the Union" as the EU is highly dependent on both countries for imports of various products.

Lagarde concluded by saying that "open trade should not have to suffer in this global reordering" and emphasized that what is required is "to combine the pursuit of a rules-based international order with a drive to reduce our strategic vulnerabilities."

Baha Breaking News (BBN) / AY