Trade Protection Along Supply Chains

Paola Conconi, Chad Bown, Aksel Erbahar and Lorenzo Trimarchi

No 15648, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: During the last decades, the United States has applied increasingly high trade protection against China. We combine detailed information on US antidumping (AD) duties – the most widely used trade barrier – with US input-output data to study the effects of trade protection against China along supply chains. To deal with endogeneity concerns, we propose a new instrument for AD duties, which combines exogenous variation in the political importance of industries across electoral terms with their historical experience in AD proceedings. We estimate the effects of protection on directly exposed and indirectly exposed (downstream and upstream) industries. We find that AD duties have a net negative impact on US jobs: they reduce employment growth in downstream industries, with no significant effects in protected and upstream industries. We provide evidence for the mechanisms behind the negative effects of protection along supply chains: AD duties decrease imports and raise prices in protected industries, increasing production costs in downstream industries.

Date: 2021-01
New Economics Papers: this item is included in nep-cwa and nep-int
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Citations: View citations in EconPapers (12)

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Related works:
Working Paper: Trade protection along supply chains (2021)
Working Paper: Trade protection along supply chains (2021)
Working Paper: Trade Protection along Supply Chains (2020)
Working Paper: Trade Protection Along Supply Chains (2020)
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