The risks to global value chains emerge not only from the decline in international trade, but also from key suppliers facing bankruptcy, and from firms re-considering their investment strategies and retrenching to core markets. Protectionist policies could exacerbate these risks. It would increase the input costs for domestic industries and would penalise exporters twice, through higher costs and through retaliation from other countries. Firms now rely on a global business model, and retrenchment risks disrupting international links, affecting growth and future innovation in both OECD countries and non-OECD economies. Co- ordination of government actions can help address these risks, can produce.
