Martin Vander Weyer Martin Vander Weyer

Are we entering a new era of fractured trade?

iStock 
issue 27 March 2021

Just as the auto industry embraces the electric future I wrote about last month, it hits a new crisis: a shortage of the microchips that power everything under the bonnet. As a parable of globalisation’s perils, this one has all the ingredients from trade war to fire, drought and Covid pestilence.

When car production slumped last year, chip-makers switched to meet booming demand for parts for smartphones, tablets and laptops. Now car factories are keen to raise output again, but there aren’t enough chips to go round. The leading source, Taiwan, is entangled in US-China tensions and its factories are afflicted by water shortages; other plants have been stricken by fire (in Japan) or extreme cold (Texas). The result is that Ford, Toyota, Volvo and Volkswagen have paused production lines and Nissan’s Sunderland plant has blamed non-delivery of chips for a decision to put 750 workers back on furlough.

Maybe there’s a wider moral here.

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