The Production Relocation and Price Effects of US Trade Policy: The Case of Washing Machines

By Aaron Flaaen, Ali Hortaçsu, F. Tintelnot. The American Economic Review, 2019

215 citations recorded by the source corpus.

We estimate the price effect of US import restrictions on washers. The 2012 and 2016 antidumping duties against South Korea and China were accompanied by downward or minor price movements along with production relocation to other export platform countries. With the 2018 tariffs, on nearly all source countries, the price of washers increased nearly 12 percent. Interestingly, the price of dryers—not subject to tariffs—increased by an equivalent amount. Factoring in dryer prices and price increases by domestic brands, the 2018 tariffs on washers imply a tariff elasticity of consumer prices of above one. (JEL F13, F14, F23, L68, 019, P33)

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/7126a00c888f59bf3a469675e6820f663b8cf60e

Citations in the corpus

Tariff Pass-Through at the Border and at the Store: Evidence from US Trade Policy (2019, unknown): “Rather than retailers earning lower profits, another possibility – following the logic and analysis in Flaaen, Hortaçsu, and Tintelnot (2019) and Amiti, Redding, and Weinstein (2019) – is that in response to the tariffs, domestic producers raise their prices to retailers on goods that compete with…”
The Impact of the 2018 Tariffs on Prices and Welfare (2019, unknown): “network, reductions in the availability of imported varieties, and complete passthrough of the tariffs into domestic prices of imported goods. We estimate the cumulative deadweight welfare cost (reduction in real income) from the US tariffs to be around $8.2 billion during 2018, with an additional c”
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.”