This chapter explores the pivotal role of governments in reshaping the global supply chain and the significance of institutionalized decisions-making in addressing supply chain challenges. As geopolitical tensions escalate, the restructuring of the global supply chain becomes increasingly intertwined with government policies. Political economics will be closely connected with the global supply chain. We will examine how the Chinese government steers the development of the global supply chain through government-led and institutional decision-making by analyzing its industrial policies, investment guidance, and economic collaborations with other nations such as the promotion of the “Belt and Road” initiative. On the other hand, the United States is encouraging U.S. enterprises to engage more in domestic research and procurement. This is shown by recent trade wars and a series of policies promoting the development of domestic semiconductor and electric vehicle industries, such as the “CHIPS and Science Act” and “Inflation Reduction Act”. This dispute between China and the U.S. reflects a trend in supply chain reconstruction towards government-led and institutionalized decision-making in target industries. It is foreseeable that governments worldwide will continue to support local manufacturing capabilities through policies such as industrial subsidies and tariffs.