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

Kyle Handley, Fariha Kamal () and Ryan Monarch

No 1270, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: 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 they represent 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.

Keywords: Global supply chains; Tariffs; Trade war; U.S. exports (search for similar items in EconPapers)
JEL-codes: F10 F13 F14 F23 H20 (search for similar items in EconPapers)
Pages: 44
Date: 2020-02-14
New Economics Papers: this item is included in nep-int
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Working Paper: Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism (2020) Downloads
Working Paper: Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism (2020) Downloads
Working Paper: Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism (2020) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:1270

DOI: 10.17016/IFDP.2020.1270

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