The United States requires that 50 percent of all parts used to construct an automobile in the United States be manufactured in the United States. As a result of this, when Toyota Motor Company builds automobile manufacturing plants in Tennessee and Ohio, it faces economic risks associated with

Local-content laws

Explanation:

Local content laws are designed to encourage increased impact of locally produced goods on the local, regional, or national economy.

It goes beyond just making profit for the firm, but also how much the local products contribute to the economy.

In the given scenario the local content law in the United States is that 50 percent of all parts used to construct an automobile in the United States be manufactured in the United States.

This is a local content requirement.

So Toyota motor Company is facing risk associated with local content laws.

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