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Tariffs, Manufacturing Employment, and Supply Chains

Joseph Steinberg

No 34236, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: I use a dynamic general-equilibrium model with supply-chain adjustment frictions to study the effects of tariffs on manufacturing employment. The model has four distinct manufacturing sectors: upstream goods with high trade elasticities (“oil”); upstream goods with low trade elasticities (“steel”); downstream goods with high trade elasticities (“toys”); and downstream goods with low trade elasticities (“cars”). I find that tariffs can increase overall manufacturing employment in the long run, but are likely to reduce it in the short run, and cause more reallocation of workers across these individual sectors than overall employment growth

JEL-codes: F11 F13 F15 F17 F41 F66 (search for similar items in EconPapers)
Date: 2025-09
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