Against the backdrop of a heated U.S.-China trade war and recent tariff threats against Mexico, it is important to understand how globalization has given rise to international supply chains that create opportunities for nations to prosper by specializing in economic activities where they are most productive and competitive. Nowhere is this more apparent than in the global value chains that drive the information and communications technology (ICT) sector, where Mexico, Korea, and Taiwan are key trade partners for the United States. Each country has industries and enterprises that have played integral roles supplying components that allow U.S. companies to concentrate on the highest-value-added stages of economic activity. For instance, America’s semiconductor industry has successfully leveraged global supply chains to focus on chip design and next-generation fabrication while remaining globally cost competitive by executing lower-value-added-activates such as assembly, package, and testing elsewhere.
ITIF hosted an expert panel discussion marking the release of a new report that examines the deep trade interlinkages and value-added trade flows between the United States, Mexico, Korea, and Taiwan across six high-tech sectors: automobiles, chemicals, computers and electronics, machinery, aerospace and other transportation equipment, and pharmaceuticals. The event addressed policy recommendations to facilitate deeper, mutually beneficial trade flows with these key supplier nations and ensure that global tech-based value chains embrace the highest standards for market- and rules-based trade.