Final answer:
The statement that MNCs can bypass tariffs by manufacturing parts and assembling products in different countries is true. MNCs use global assembly lines and outsourcing to minimize costs and navigate international trade regulations more favorably.
Step-by-step explanation:
Operating in different countries does indeed create opportunities for Multinational Corporations (MNCs) to bypass protective tariffs by making parts in one country and assembling the final product in another. This statement is true. MNCs have leveraged globalization, advancements in transportation, and communication technologies to manage a geographically dispersed production process. This strategy can be part of a broader practice known as global assembly lines, where different parts are made in various countries and assembled elsewhere to minimize costs, including those associated with tariffs and labor.
For example, an MNC might design a product in a developed nation but outsource the production of components to countries where the costs of materials and labor are lower. Then they might assemble the final product in another country that offers tax advantages or has a trade agreement with the intended market, reducing or eliminating tariffs on the assembled goods.
Additionally, it is not uncommon for MNCs to use their economic influence to lobby for regulations that are favorable to their business, furthering their ability to structure their operations across multiple countries to optimize for profit margins. Outsourcing plays a significant role in this process, often resulting in the movement of jobs from developed to developing countries, where costs are lower and regulations may be less stringent.