Podcast
Questions and Answers
What economic impact does reshoring have on multinational IT firms in the USA?
What economic impact does reshoring have on multinational IT firms in the USA?
- It may bring less profit due to higher production costs. (correct)
- It allows firms to operate with fewer regulations.
- It increases profit margins significantly.
- It has no effect on production costs.
What is one of the main reasons for the increased production costs of chips in the USA compared to Taiwan?
What is one of the main reasons for the increased production costs of chips in the USA compared to Taiwan?
- Higher labor costs and stricter regulations. (correct)
- The use of cheaper raw materials in the USA.
- Less access to advanced technology.
- Lower demand for chips domestically.
Which legislation was passed by the US federal government to encourage reshoring of the chip-making industry?
Which legislation was passed by the US federal government to encourage reshoring of the chip-making industry?
- The American Workforce Improvement Act
- The Manufacturing Recovery Act
- The CHIPS and Science Act (correct)
- The Tech Industry Expansion Act
Which company is mentioned as having invested in building chip factories in the USA?
Which company is mentioned as having invested in building chip factories in the USA?
What is one of the key motivations for attracting foreign key IT component suppliers to the USA?
What is one of the key motivations for attracting foreign key IT component suppliers to the USA?
What was the percentage decrease in US imports of IT products from China between 2018 and 2022 due to tariffs?
What was the percentage decrease in US imports of IT products from China between 2018 and 2022 due to tariffs?
Which of the following countries became a potential relocation site for IT firms looking to escape tariffs?
Which of the following countries became a potential relocation site for IT firms looking to escape tariffs?
What major global event affected the production and transportation of IT components?
What major global event affected the production and transportation of IT components?
What component was notably affected in the supply chain disruptions for Apple during the pandemic?
What component was notably affected in the supply chain disruptions for Apple during the pandemic?
Which strategy did some multinational IT firms adopt following the supply chain disruptions caused by COVID-19?
Which strategy did some multinational IT firms adopt following the supply chain disruptions caused by COVID-19?
What was the tariff percentage on lithium-ion batteries?
What was the tariff percentage on lithium-ion batteries?
What was a significant outcome of strict lockdown measures imposed in various countries during the pandemic?
What was a significant outcome of strict lockdown measures imposed in various countries during the pandemic?
What incentive have some MDCs offered to foreign component suppliers post-pandemic?
What incentive have some MDCs offered to foreign component suppliers post-pandemic?
What was a common consequence of component supply disruptions during the pandemic?
What was a common consequence of component supply disruptions during the pandemic?
Where was the Seagate Technology factory located, as mentioned in the context provided?
Where was the Seagate Technology factory located, as mentioned in the context provided?
What is a primary reason for US IT firms shifting production operations from China?
What is a primary reason for US IT firms shifting production operations from China?
Which country has NOT been mentioned as a new destination for IT production operations?
Which country has NOT been mentioned as a new destination for IT production operations?
What effect did the COVID-19 pandemic have on the globalization of the IT industry?
What effect did the COVID-19 pandemic have on the globalization of the IT industry?
What is deglobalisation predicted to result from?
What is deglobalisation predicted to result from?
How have US trade restrictions affected the IT industry’s operations?
How have US trade restrictions affected the IT industry’s operations?
Why are some MDCs attracting foreign IT firms to set up factories?
Why are some MDCs attracting foreign IT firms to set up factories?
What was the monetary value of the extra tariffs announced by the US federal government on Chinese imports in 2018?
What was the monetary value of the extra tariffs announced by the US federal government on Chinese imports in 2018?
Flashcards
Trade Restrictions
Trade Restrictions
Government policies that limit or regulate international trade, often through tariffs, quotas, or sanctions.
Reshoring
Reshoring
The process of moving production operations back to a company's home country from a foreign location.
Deglobalisation
Deglobalisation
A trend toward reduced interdependence and integration between countries, often characterized by decreased international trade and investment.
Comparative Advantage
Comparative Advantage
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Supply Chain Disruption
Supply Chain Disruption
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Impact of Trade Restrictions on IT Industry
Impact of Trade Restrictions on IT Industry
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Impact of COVID-19 on IT Industry
Impact of COVID-19 on IT Industry
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Tariff Impact on IT Imports
Tariff Impact on IT Imports
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Relocation of IT Production
Relocation of IT Production
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COVID-19 Impact on Supply Chains
COVID-19 Impact on Supply Chains
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Disrupted Apple Supply
Disrupted Apple Supply
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Reshoring IT Production
Reshoring IT Production
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Incentives for Component Suppliers
Incentives for Component Suppliers
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Key IT Components
Key IT Components
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Globalized Supply Chains
Globalized Supply Chains
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Production Disruptions
Production Disruptions
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Location of IT Industry
Location of IT Industry
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Financial Incentives for Reshoring
Financial Incentives for Reshoring
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Factors Affecting Reshoring Costs
Factors Affecting Reshoring Costs
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CHIPS and Science Act
CHIPS and Science Act
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TSMC's Investment in Arizona
TSMC's Investment in Arizona
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Study Notes
Impact of Trade Restrictions and COVID-19 on IT Industry Location
- Multinational IT firms have historically located production in lower-cost countries, with China being a major destination.
- Rising production costs in China and US trade restrictions are shifting production to other countries like Vietnam, Cambodia, and India.
- The COVID-19 pandemic disrupted global supply chains, motivating some US firms to reshore operations, potentially leading to deglobalisation.
- Developed countries are actively attracting foreign IT firms to establish factories, securing their supply of critical components.
US Trade Restrictions on China
- In 2018, the US imposed extra tariffs on Chinese IT imports, impacting US imports significantly.
- Tariffs on products like hard disk drives and lithium-ion batteries contributed to a decrease in US imports of IT products from China.
- This prompted multinational firms to relocate some production from China to lower-cost countries.
Impact of the COVID-19 Pandemic
- COVID-19 significantly impacted global goods movement and production, as lockdowns halted or reduced factory operations.
- Disruptions in global supply chains affected IT components and transportation, leading to delays and shortages.
- Lockdowns caused labour shortages in major assembly plants, impacting iPhone and other production lines.
- This disrupted factory operations and delivery times.
Reshoring and FDI in Developed Countries
- Some MDCs (developed countries) have incentivized reshoring to secure IT component supply.
- Incentives and subsidies are used to attract foreign investment in chip manufacturing facilities.
- This trend is accelerating the relocation of IT manufacturing back to developed countries.
- Apple relocated part of its production to the United States.
Examples of Reshoring and FDI
- US companies like Micron and Intel invested in chip manufacturing facilities to reduce reliance on foreign suppliers.
- TSMC's investments in Arizona are subsidized by US government incentives.
- Reshoring efforts and incentives are aimed at securing component production within developed countries.
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Description
This quiz explores the effects of US trade restrictions and the COVID-19 pandemic on the global IT industry, particularly focusing on production shifts from China to countries like Vietnam, Cambodia, and India. It highlights how these factors contribute to potential deglobalisation and the strategies of developed countries to attract IT firms.
