Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism

By Kyle Handley, Fariha Kamal, R. Monarch. International Finance Discussion Paper, 2020

124 citations recorded by the source corpus.

We examine the impacts of the 2018-2019 U.S. import tariff increases on U.S. export growth through the lens of supply chain linkages. Using 2016 confidential firm-trade linked data, we document the implied incidence and scope of new import tariffs. Firms that eventually faced tariff increases on their imports accounted for 84% of all exports and represented 65% of manufacturing employment. For all affected firms, the implied cost is $900 per worker in new duties. To estimate the effect on U.S. export growth, we construct product-level measures of import tariff exposure of U.S. exports from the underlying firm micro data. More exposed products experienced 2 percentage point lower growth relative to products with no exposure. The decline in exports is equivalent to an ad valorem tariff on U.S. exports of almost 2% for the typical product and almost 4% for products with higher than average exposure.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/099966f2ad4fca9b1963799c5466849c9f139561

Citations in the corpus

• De-Globalisation? Global Value Chains in the Post-COVID-19 Age (2020, unknown): “…body of work seems to indicate that the increased trade barriers in Chart 12 and the retaliation they triggered from China, has harmed both U.S. consumers (see Amiti et al., 2019, Fajgelbaum et al., 2020) and also the U.S. manufacturing sector (see Flaanen et al., 2020, Handley et al., 2020).”