The US-China trade war and pandemic put pressure on the electronics supply chain: The US-China trade war and pandemic led to a breakdown in the traditional model of global manufacturing, causing pressure on the electronics supply chain
The era of globalization led to the offshoring of manufacturing to countries like China, where labor was cheap, and contract manufacturing became the dominant model for producing consumer goods. However, this approach came with risks, as seen in the ongoing trade war between the US and China. When Donald Trump took office, he identified the large US trade deficit with China as a problem and initiated a series of actions to address it. This resulted in a trade war, which has significantly impacted the electronics industry and its supply chain. The tension between the two economic powers has led to a rethinking of manufacturing operations and a potential shift away from globalization. The US-China trade war, coupled with the pandemic, has put pressure on the electronics supply chain and led to a breakdown in the traditional model of global manufacturing.
The economic ties between Taiwan and China led to the formation of massive electronics manufacturing clusters in China: Taiwanese companies took advantage of China's cheaper labor and efficient manufacturing processes, leading to a highly interconnected and efficient global manufacturing system for electronics. This system produced billions of devices, symbolized by Apple's iPhone.
The economic ties between Taiwan and China led to the formation of massive electronics manufacturing clusters in China in the late 1990s and early 2000s. This was driven by the emergence of a mass market for electronics and the rise of the PC and later, the smartphone. Taiwanese companies, including Foxconn, took advantage of China's cheaper labor and efficient manufacturing processes, leading to a highly interconnected and efficient global manufacturing system. Apple's iPhone, launched in 2007, became a symbol of this system's success, with billions of devices produced in just a few years. However, this globalized machine faced pressure starting around the time of the iPhone's release due to tensions between the US and China, which would later escalate into a trade war. The rise of Silicon Valley and its focus on software, intellectual property, and design further solidified this shift in the tech industry.
Snowden Scandal and China's Response: The Snowden scandal led China to build up a domestic tech supply chain and reduce dependence on US companies due to concerns over surveillance and intellectual property theft. In response, Western governments and companies considered cutting ties with China, but hacking incidents continued and some companies moved production out of China.
The Snowden scandal in 2013 brought concerns to the forefront for countries, particularly China, about their reliance on Western technology and the potential for surveillance. This led to efforts by China to build up a domestic technology supply chain and reduce dependence on US companies. In response, Western governments and companies began to consider cutting ties with China due to concerns over cyber espionage and intellectual property theft. The US accused China of hacking and collecting trade secrets and technological know-how, leading to an agreement between US President Barack Obama and Chinese President Xi Jinping in 2015 to stop such activities. However, the frequency of hacking incidents continued, and some companies moved production out of China due to customer requests. Overall, the Snowden scandal marked a turning point in the relationship between technology and national security, leading to increased efforts by countries to secure their technology and data.
US-China trade war leads to manufacturing shift: The US-China trade war resulted in tariffs and supply chain reconfiguration, causing some US companies to move production out of China to avoid added costs and national security concerns.
The Trump administration's efforts to address concerns about Chinese espionage and intellectual property theft through a trade war led to a massive shift in manufacturing out of China for some US companies. The trade war resulted in tariffs on Chinese goods, causing many companies to consider moving production outside of China to avoid the added costs. The administration also took steps to restrict business dealings with Chinese tech companies like Huawei, citing national security concerns. These actions led to a significant reconfiguration of global supply chains.
Global tech industry faces challenges from trade tensions and COVID-19: Companies shift towards more resilient supply chain models with multiple manufacturing hubs, moving away from just-in-time and low inventory strategies
The global tech industry faced significant challenges due to trade tensions between the US and China, leading to tariffs and supply chain disruptions. The situation was further complicated by the COVID-19 pandemic, which forced the shutdown of manufacturing hubs in China and disrupted international trade. As a result, many companies have reevaluated their supply chain strategies, moving towards more resilient models with multiple manufacturing hubs closer to end markets. The past model of just-in-time, low inventory has been deemed too risky, and companies now expect their supply chains to be more like networks, with a continued significant presence in China but also separate manufacturing hubs in regions like Southeast Asia and India.
Global economic landscape shifting due to US-China tensions: US and China's economic decoupling could lead to a new global economic model, with potential negative consequences for Western companies' access to Chinese market
The global economic landscape is shifting significantly due to geopolitical tensions between the US and China. This shift could lead to a decoupling of economies, with the US looking to Southeast Asia and Mexico for manufacturing, while China aims for greater self-reliance. The end of the US-China trade war under President-elect Joe Biden is possible, but the broader decoupling process is likely to continue. This could result in a new global economic model, moving away from the traditional globalization model. However, the extent of this separation and the impact on Western companies' access to the Chinese market remains to be seen. If not handled carefully, this could lead to a vicious cycle of protectionism and economic blocks. Companies and governments need to navigate these changes carefully to minimize potential negative consequences.
Shopping with a personal touch through podcasts: 1800flowers.com/acast combines online shopping with podcasts for a unique, immersive, and enjoyable experience that differentiates the brand and drives sales
1800flowers.com/acast is an innovative platform that combines the convenience of online shopping with the personal touch of a radio broadcast. This unique approach allows customers to order flowers and gifts while also enjoying engaging and entertaining content from their favorite podcasts. The integration of podcasts into the shopping experience creates a more immersive and enjoyable way for customers to make purchases. This strategy not only differentiates 1800flowers.com from its competitors but also appeals to the growing number of podcast listeners. By providing a seamless and enjoyable shopping experience, 1800flowers.com/acast is able to attract and retain customers, ultimately driving sales and business growth.
An economic uncoupling
Recent Episodes from Behind the Money
How a 7-Eleven takeover could reshape corporate Japan
Companies in Japan have long avoided foreign acquisitions. But Canada-based Alimentation Couche-Tard’s recent unsolicited bid for the owner of the 7-Eleven convenience store chain is testing that premise. The FT’s Tokyo bureau chief Leo Lewis examines how these events could shape corporate Japan’s future.
- - - - - - - - - - - - - - - - - - - - - - - - - -
For further reading:
The takeover fight that could reshape Japan
After 7-Eleven, Japan’s M&A scene may never be the same again
7-Eleven bid is the next stage in revitalising corporate Japan
- - - - - - - - - - - - - - - - - - - - - - - - - -
On X, follow Leo Lewis (@urbandirt) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more.
Read a transcript of this episode on FT.com
Hosted on Acast. See acast.com/privacy for more information.
Jay Powell – lucky or good?
As Jay Powell’s Federal Reserve contemplates making the first interest rate cut in more than two years, we’re taking a step back with the FT’s US financial commentator Robert Armstrong. How did Powell tame inflation without crashing the economy? And how might history judge his leadership?
Clips from Associated Press
- - - - - - - - - - - - - - - - - - - - - - - - - -
For further reading:
Martin Sandbu’s column: A self-congratulatory inflation narrative at Jackson Hole
- - - - - - - - - - - - - - - - - - - - - - - - - -
On X, follow Robert Armstrong (@rbrtrmstrng) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more.
Want to hear more from Rob? Listen to the Unhedged podcast.
Read a transcript of this episode on FT.com
Hosted on Acast. See acast.com/privacy for more information.
Best Of: How Dubai is reshaping the global oil trade
This week, we’re revisiting an episode from last year. For decades, the global centre for oil trading has been Geneva, Switzerland. But Russia’s war in Ukraine changed that. Sanctions have made it harder for western traders to move Russian oil. Now, traders are flocking to a new trading hub that has no restrictions on oil from Russia: the United Arab Emirates. The FT’s Tom Wilson explains how this shift has helped the UAE replace Switzerland, and whether the global energy industry is shifting away from western economies.
- - - - - - - - - - - - - - - - - - - - - - - - - -
For further reading:
How Dubai became ‘the new Geneva’ for Russian oil trade
Switzerland questions oil trader over sidestep of Russian sanctions
Letter: Energy trading is opaque — and that suits Big Oil
- - - - - - - - - - - - - - - - - - - - - - - - - -
Register now for the FT Weekend Festival, and claim £24 off your pass using promo code FTPodcast at: ft.com/festival
- - - - - - - - - - - - - - - - - - - - - - - - - -
On X, follow Tom Wilson (@thomas_m_wilson) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more.
Read the transcript of this episode which was first aired in August 2023
Hosted on Acast. See acast.com/privacy for more information.
Private credit’s ‘golden era’ shows signs of tarnish
Private credit took Wall Street by storm. But at a software company called Pluralsight, recent loan troubles are now highlighting risks that could be hidden in the sector. The FT’s senior US corporate finance correspondent Eric Platt and Due Diligence reporter Amelia Pollard walk through what went wrong with Pluralsight, and how that could shape private credit’s future.
Clips from Bloomberg, CNBC
- - - - - - - - - - - - - - - - - - - - - - - - - -
For further reading:
A messy loan restructuring highlights risk lurking in private credit
Private credit is even larger than you think
A buyout gone wrong creates fireworks in the private credit market
Vista and co-investors lose $4bn in Pluralsight restructuring
- - - - - - - - - - - - - - - - - - - - - - - - - -
On X, follow Eric Platt (@ericgplatt), Amelia Pollard (@ameliajpollard) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more.
Register now for the FT Weekend Festival, and claim £24 off your pass using promo code FTPodcast at: ft.com/festival
Read a transcript of this episode on FT.com
Hosted on Acast. See acast.com/privacy for more information.
Is business better in Texas?
Hundreds of companies have moved their headquarters to Texas in recent years, including big names like Tesla, HP and Charles Schwab. They’ve been enticed by low taxes, light regulation and the promise to run their businesses on their own terms. But the FT’s Houston correspondent Myles McCormick explains that there might be limits to that message of economic freedom.
Clips from ABC News, CBS, Fox 26, KHOU 11
- - - - - - - - - - - - - - - - - - - - - - - - - -
For further reading:
Will US companies keep faith in the ‘Texas miracle’?
Beware the Texas advance on Wall Street
Texas group plans stock exchange to compete with NYSE and Nasdaq
For further listening:
Why Elon Musk is breaking up with Delaware
- - - - - - - - - - - - - - - - - - - - - - - - - -
On X, follow Myles McCormick (@mylesmccormick_) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more.
- - - - - - - - - - - - - - - - - - - - - - - - - -
Register now for the FT Weekend Festival, and claim £24 off your pass using promo code FTPodcast at: ft.com/festival
Read a transcript of this episode on FT.com
Hosted on Acast. See acast.com/privacy for more information.
Is there a bubble waiting to burst in India?
Indian equities are soaring right now. The country’s benchmark Nifty 50 index has doubled in just five years, beating out the pace of Japan, China and even the US. And it’s all being driven by millions of domestic investors who are piling into the market for the first time. But this boom has regulators sounding the alarm. The FT’s Mumbai correspondent Chris Kay explains why a bubble might be forming and what could happen to these first-time investors if it bursts.
- - - - - - - - - - - - - - - - - - - - - - - - - -
For further reading:
The young investors gambling on Indian stocks
Investors bet an election win by Narendra Modi will extend India’s stock market boom
India closes in on China as largest emerging market
- - - - - - - - - - - - - - - - - - - - - - - - - -
On X, follow Chris Kay (@christopherkay) and Saffeya Ahmed (@saffeya_ahmed).
Read a transcript of this episode on FT.com
Hosted on Acast. See acast.com/privacy for more information.
The Economics Show with Soumaya Keynes: What’s wrong with economics?
This week, we’re bringing you something from our fellow FT podcast, The Economics Show with Soumaya Keynes.
Sir Angus Deaton won the Nobel Prize in Economics in 2015. So when he says he is rethinking many of his assumptions about the field, it matters. Today on the show, Soumaya discusses what we are getting wrong about everything from inequality to immigration to the role of globalisation in the reduction of poverty.
Soumaya Keynes writes a column each week for the Financial Times. You can find it here.
Subscribe to Soumaya's show on Apple, Spotify, Pocket Casts or wherever you listen.
Read a transcript of this episode on FT.com
- - - - - - - - - - - - - - - - - - - - - - - - - -
Plus, tell us what you think about Behind the Money! Complete this survey before August 29 for a chance to win a pair of Bose QuietComfort 35 Wireless headphones (terms and conditions can be found here).
Hosted on Acast. See acast.com/privacy for more information.
Why executive pay is skyrocketing
Remuneration among CEOs in the US is rising quickly. It’s been hard to miss recent examples of massive pay packages, like for Tesla’s Elon Musk. But that growth is far outpacing that of wages for everyday workers in the US. The FT’s corporate governance reporter Patrick Temple-West outlines some reasons this is happening and looks at whether change is afoot.
Clips from Associated Press, CNBC, BBC News
- - - - - - - - - - - - - - - - - - - - - - - - - -
For further reading:
US executive pay rises at fastest rate in 14 years
Business school teaching case study: executive pay and shareholder democracy
UK-US CEO pay gap widens as FTSE bosses’ remuneration stagnates
- - - - - - - - - - - - - - - - - - - - - - - - - -
Plus, tell us what you think about Behind the Money! Complete this survey before August 29 for a chance to win a pair of Bose QuietComfort 35 Wireless headphones (terms and conditions can be found here).
And, send us a question: Behind the Money is teaming up with the FT’s Moral Money newsletter to answer your questions about what “responsible” business and finance really looks like in the 21st century. That means topics like sustainability, ESG, diversity and inclusion and clean energy investment. We might read out, or play the question from your voicemail with your name, on the show. To get in touch, record a voice message here: sayhi.chat/0humz, or send us an email with your question to michela.tindera@ft.com.
On X, follow Patrick Temple-West (@temple_west) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more.
Read a transcript of this episode on FT.com
Hosted on Acast. See acast.com/privacy for more information.
Less regulation, more problems?
Two recent Supreme Court decisions have taken a lot of rulemaking power away from federal agencies. And it could shake up how businesses in the US operate. Many chief executives are happy about these decisions — the less regulation, the better. But could these rulings come with their own risks? Clips from Bloomberg, CBS News, CNBC
- - - - - - - - - - - - - - - - - - - - - - - - - -
For further reading:
US businesses may soon find that deregulation comes with risks
Supreme Court EPA ruling puts regulators in handcuffs
The abortion pill case is a disaster for innovation everywhere
- - - - - - - - - - - - - - - - - - - - - - - - - -
Plus, tell us what you think about Behind the Money! Complete this survey before August 29 for a chance to win a pair of Bose QuietComfort 35 Wireless headphones (terms and conditions can be found here).
On X, follow Brooke Masters (@brookeamasters) and Saffeya Ahmed (@saffeya_ahmed).
Read a transcript of this episode on FT.com
Hosted on Acast. See acast.com/privacy for more information.
What the City of London wants from Labour
The Labour Party has come back into power in the UK after 14 years. For the City of London, this brings hope for some stability amid the rise of competing financial sectors around the world. But will efforts to revitalize markets and the economy work out? The FT’s chief UK business correspondent Michael O’Dwyer analyzes the expectations of City of London executives from the newly elected government. Clips from BBC, Today, NBC News, CNN
- - - - - - - - - - - - - - - - - - - - - - -
For further reading:
How will Rachel Reeves run the UK’s finances?
The City of London’s wish list for the new Labour government
The club of City executives plotting a revival for the UK’s capital markets
- - - - - - - - - - - - - - - - - - - - - - -
Plus, tell us what you think about Behind the Money! Complete this survey before August 29 for a chance to win a pair of Bose QuietComfort 35 Wireless headphones (terms and conditions can be found here).
And, send us a question: Behind the Money is teaming up with the FT’s Moral Money newsletter to answer your questions about what “responsible” business and finance really looks like in the 21st century.
That means topics like sustainability, ESG, diversity and inclusion and clean energy investment. We might read out, or play the question from your voicemail with your name, on the show. To get in touch, record a voice message here: sayhi.chat/0humz, or send us an email with your question to michela.tindera@ft.com.
On X, follow Michael O’Dwyer (@_MODwyer) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more.
Read a transcript of this episode on FT.com
Hosted on Acast. See acast.com/privacy for more information.
Related Episodes
How To Fund The Search For A COVID-19 Vaccine And Boost The Recovery
The hunt is on for a clinical therapy to prevent or treat COVID-19. But what’s the best way to go about this? How can governments accelerate this process? And what can governments do now to help a robust economic recovery? On this week’s Odd Lots, we speak with Bill Janeway, an economist and venture capitalist, who has written extensively on how the government can accelerate innovation by the private sector. He explains how his thoughts translate into the medical space and the post-crisis economy overall.
See omnystudio.com/listener for privacy information.
U.S.-China Trade War In Uncharted Waters
While the Chinese negotiators may have underestimated Trump’s resolve to fundamentally change the Sino-U.S. relationship and use tariffs as a means to that end, the U.S. negotiating team may now be underestimating the difficulty of writing intellectual property rights (IPR) protections into Chinese law, underestimating Chinese resistance to interference by foreign powers in the internal workings of its government in the process.
Don't forget to subscribe!
Referred to as Mr. China, Jack Perkowski is an expert on doing business in the country. After spending twenty years on Wall Street, Jack moved to Beijing in 1992 where he has been a pioneer in the development of China’s auto industry and in bringing private equity to the country. In this series of interviews and podcasts, Jack provides insights into ongoing developments in China and how they are impacting the global economy.
Why the U.S. Is Running Out of Medical Supplies
States and cities across the United States are reporting dangerous shortages of the vital medical supplies needed to contain the coronavirus. Why is the world’s biggest economy suffering such a scramble to find lifesaving equipment?
Guest: Sarah Kliff, an investigative reporter covering health care for The New York Times. For more information on today’s episode, visit nytimes.com/thedaily.
Background reading:
- The scarcity of ventilators has become an emergency, forcing doctors to make life-or-death decisions. The collapse of a government effort to produce an emergency stockpile reveals much about the challenges now being faced in fighting the pandemic.
- This map of the United States shows gaps in the existing health care infrastructure — and which areas may face a shortage of hospital beds as the virus spreads.
Negotiating In China: 10 Rules for Success
Based on 25 years of experience negotiating deals in China, Jack describes his "10 Rules For Success" in this podcast, referencing relevant aspects of the current trade negotiations between China and the United States.
Don't forget to subscribe!
Referred to as Mr. China, Jack Perkowski is an expert on doing business in the country. After spending twenty years on Wall Street, Jack moved to Beijing in 1992 where he has been a pioneer in the development of China’s auto industry and in bringing private equity to the country. In this series of interviews and podcasts, Jack provides insights into ongoing developments in China and how they are impacting the global economy.