The recently discovered new strain of coronavirus has resulted in tragic deaths in many places around the world. Parts of Asia have suffered disproportionately as a result of the disease outbreak. One aspect of the epidemic on the Chinese mainland may impact American businesses in an unexpected way: a slowdown in the supply chain for some goods and services, including delays in obtaining some in-demand electronic components.

Disruptions in The Global Chain of Commerce

Many repairers of high tech products depend extensively upon electronic components imported to the United States from China and other nations in Asia. Some experts forecast the cell phone repair industry might experience temporary disruptions and delays in some cases as a result of supply chain issues. The Sacramento Bee recently reported about widespread economic impacts of Chinese government health quarantines, for example. Some phone repair companies cite delays obtaining products and certain replacement components as a reason for slowdowns in their customer service.

Currently, the mobile phone industry contributes billions to the U.S. economy. Repairs constitute an increasingly important segment of this business. Conditions which impact manufacturers in China, Japan, South Korea, and Vietnam and cause production problems inevitably also affect consumers in other parts of the world.

Governments Takes Steps to Respond to The Spread of Coronavirus

Due to concerns about the spreading epidemic in China, the Chinese government reportedly extended some factory closures during early February. This decision has caused sporadic disruptions and delays in the availability of some cell phone components worldwide. Industries as varied as tourism and manufacturing face impacts from these developments.

In early March, the Federal Reserve in the United States announced an emergency interest rate cut in response to the economic impacts of the recent coronavirus epidemic. President Trump had repeatedly called for this action. Several other governments have already reduced interest rates due to concern that a global economic slowdown might accompany the spread of the illness. Chairman Jerome Powell described the decision to implement an emergency rate cut of half a percentage point as an effort to increase public confidence in the economy.

An Interconnected Global Economy

The full impacts of the coronavirus tragedy on the U.S. economy remain unclear. Yet the recent delays reported by some cell phone repairers suggest high tech industries today frequently depend upon complex global supply chains.