Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector
By Aaron Flaaen, Justin R. Pierce. Finance and Economics Discussion Series, 2019
127 citations recorded by the source corpus.
This paper estimates the relationship between the U.S. tariff increases of 2018-2019 and outcomes in domestic manufacturing. Despite being intended to boost manufacturing activity, we find U.S. industries more exposed to tariff increases experience relative reductions in employment, as a small positive effect from import protection is offset by larger negative effects from rising input costs and retaliatory tariffs. Higher tariffs are also associated with relative increases in producer prices due to rising input costs. Lastly, we document broader labor market impacts, as counties more exposed to rising tariffs exhibit relative increases in unemployment and declines in labor force participation.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/62fc3ae28b8ba6cd4054cb49b7bff0eb7a691646
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In Economics and Econometrics
Citations in the corpus
- De-Globalisation? Global Value Chains in the Post-COVID-19 Age (2020, unknown): “In the former case, and as some studies have already shown (see Flaaen et al., 2020), production might relocate to (third) countries unaffected by the bilateral trade war rather than being reshored to domestic economies.”
- Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism (2020, background): “Flaaen and Pierce (2019) consider the effect of higher input costs from the U.S. tariffs using aggregated input-output tables, but focus on domestic outcomes in the U.S. manufacturing sector.”