GEP Seminar: Paola Conconi (Université Libre de Bruxelles)

Trade protection along supply chains (with Chad Bown, Aksel Erbahar, and Lorenzo Trimarchi)

Abstract:   During the last few decades, the United States has applied increasingly high antidumping (AD) duties on imports from China. We combine detailed information on these duties with US input-output data to study the effects of trade protection along supply chains. To deal with endogeneity concerns, we instrument tariffs exploiting variation in the political importance of industries – resulting from changes in the identity of swing states across electoral terms – and in their historical experience at petitioning for AD. We find that tariffs in upstream industries have large negative effects on downstream industries, raising input prices and decreasing employment, sales, and investment. Our baseline estimates for the last seven complete presidential terms (1988-2016) indicate that around 570,000 US jobs were lost in downstream industries due to AD duties against China in upstream industries. When we extend the analysis to protectionist measures introduced under Trump’s presidency, we find that almost 200,000 jobs were lost in downstream industries in the first two years of his term.

Link to paper (.pdf)