To indulge in protectionism (you should first know the "true" nationality of products)
Professor Stéphane Garelli on world trade
Article

To indulge in protectionism (you should first know the "true" nationality of products)

Professor Stéphane Garelli on world trade
4 min.
July 2018

… and in a globalized world, it’s far from easy. When President Trump imposes tariffs on aluminum or steel, it is relatively clear where these products come from. Simply put, steel is made in Germany and aluminum in Canada. When Europe retaliates on whisky or orange juice, it is equally straightforward to determine their origin. They are homogeneous products.

However, it is far more difficult to establish the nationality of products that are made of many components assembled from different parts of the world. A few years ago, researchers at the University of California in Los Angeles traced the origin of the 431 components of an iPod. They came from several different parts of the world to be assembled in the Foxconn factory in Longhua, China. In the end, the Chinese added value of the final product did not exceed 5%. But upon arrival at US Customs, the iPod was statistically considered a Chinese product. Really?

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