Supply chains were once studied only by worthy nerds interested in esoteric topics, such as the computerization of bills of lading. Or, at places like the World Economic Forum in Davos, commentators have commented extensively on the process of globalization.

Last year, though, the topic went mainstream, as dozens of ships docked outside the ports of Los Angeles and Long Beach and the auto industry lacked semiconductors.

These supply chain disruptions come amid the coronavirus pandemic — and after years of trade tensions, especially between the U.S. and China — that have fueled the belief that globalization is vulnerable to external shocks. It looks like our global trading system is broken, as many expected.

Politicians, who had always been skeptical of globalization, saw an opportunity and joined programs to encourage repatriation, nearshoring, and “friendlines” (supply chains with only political allies).

But if you look closely, the causes of (and still ongoing) supply chain problems in 2021—and the policy lessons to be learned from them—seem to be different. As the global economy recovers from the COVID-19 shock in 2020, what we have seen so far is far less the result of a pandemic-related supply shock and more like a massive recovery in demand.

Specifically, as pent-up demand for these goods surfaced after a year or more of lockdown, there was a dramatic shift in buying consumer durables and a surge in trade.

What evidence is there either way? Well, if the rant was all about supply-side shocks. Then we might have expected a big drop in trade itself. We also expect some plausible causation due to Covid-driven worker shortages, such as freight or ports themselves getting stuck. In fact, we haven’t really seen much.

America’s much-maligned West Coast ports have been handling record volumes of cargo. Shipping lines and manufacturers have complained about issues – no doubt there are also problems with factory closures in Asia due to the Covid-19 outbreak in the workforce. In general, however, ports and the international trading system have not collapsed due to staff shortages.

By the end of 2021, some evidence begins to emerge that Shipping peaks — Although the Omicron variant of Covid maintains levels of uncertainty and these rates are high.

As shipping expert, economist and author Mark Levinson point out, before the Covid crisis, the maritime industry was running far below capacity – so much so that some related companies were forced to merge.

So it’s kind of unbelievable that a sudden shortage of staff destroys all processing power. Now, a massive shipbuilding and infrastructure program will likely only lead to an oversupply in a year or 18 months from now. The same may be true for one of the most visible products in the supply chain crunch: semiconductors, which have shut down auto production around the world. The U.S. has since set aside $52 billion to increase semiconductor production, while the European Union is scrambling to come up with its own subsidy program.

For now, the jury is still out on whether the demand-side or supply-side arguments are more accurate as to why the supply chain is tightening. But if the former, many of the measures being taken, or at least proposed, appear to end up doing more harm than good.

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Creating a subsidized semiconductor industry that ultimately depends on the state forever is not the recipe for an efficient global economy. Nor are a series of government interventions to encourage reshoring, such as those currently being considered and actually implemented by Joe Biden’s US administration.

There doesn’t seem to be lots of evidence Companies are returning voluntarily. Surveys show that companies continue to trade globally and invest in China (especially to gain access to the huge Chinese market) and plan to continue to do so.

So, if anything, the biggest threat to a globalized economy is political, not economic. China has been pursuing a “dual circulation” strategy, with a fast-growing domestic economy increasingly isolated from the trade sector: this does not mean the end of globalization, but it is certainly a brake.

The U.S. has chosen certain industries, including semiconductors and electric vehicles, which it wants to encourage domestic production. So far, these efforts have been overcome by the commercial logic of trade. But even if supply chain issues resolve themselves, the threat of political interference remains.

Alan Beattie for the Financial Times Trade secrets communication