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Fresh waves of COVID-19 cases in major manufacturing hubs in Asia could hit global supply chains — and that could cause inflation to rise quicker in the United States, say experts.

Japan, South Korea, Taiwan and Vietnam are among Asian manufacturing economies that have reported a renewed COVID outbreak in the last few weeks. Products or components made in those economies are shipped globally to places as far as the US, and the increase in infections has come as demand for goods from the US and China has contributed to “a really fast rise” in factory-gate prices in East Asia.

Additionally, any more issues in the global supply chain, such as the shutdown of key factories across Asia, could result in a big push up in inflation. Already, Vietnamese authorities have temporarily shut four industrial parks in the northern province of Bac Giang due to COVID’s resurgence.

The global supply chain has been experiencing ongoing stress as equipment shortages, transportation bottlenecks and price spikes are nearing the highest levels in recent memory. Those issues, combined with incidents like the Suez Canal blockage and and port closures across the world related to COVID-19 outbreaks, have led to a rising concern that a supercharged global economy will stoke inflation.

Source: CNBC