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Trade Policy and the China Syndrome

Lorenzo Trimarchi ()

No 2020-15, Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: The recent backlash against free trade is partially motivated by the decline in manufacturing employment due to rising import competition from China. Previous studies about the “China syndrome” neglect the role of trade policy. This is surprising, given that politicians in high-income countries have extensively used antidumping (AD) measures to protect their economies from rising Chinese imports. In this paper, I estimate the causal effect of trade protection on imports and employment, by constructing a new instrument for AD measures based on industries’ importance in swing states and experience in filing AD petitions. I show that AD duties have reduced import competition, decreasing the annual growth rate of US imports from China by 0.40 percentage points on average. They have also helped contain the China syndrome, by increasing the annual growth rate of employment in protected industries by 0.07 percentage points. These results show that protectionist instruments allowed under GATT/WTO rules can be used to attenuate the effects of import competition on employment.

Keywords: Antidumping; Import Competition; Manufacturing Jobs; US-China Trade Relations (search for similar items in EconPapers)
JEL-codes: F13 F14 F16 J20 (search for similar items in EconPapers)
Pages: 40 p.
Date: 2020-04
New Economics Papers: this item is included in nep-int and nep-lma
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