NATIONAL BUREAU OF ECONOMIC RESEARCH
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Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism

Kyle Handley, Fariha Kamal, Ryan Monarch

NBER Working Paper No. 26611
Issued in January 2020, Revised in August 2020
NBER Program(s):International Finance and Macroeconomics, International Trade and Investment, Public Economics

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 identify firms that eventually faced tariff increases. They accounted for 84% of all exports and represented 65% of manufacturing employment. For the average affected firm, the implied cost is $900 per worker in new duties. We construct product-level measures of exporters' exposure to import tariff increases and estimate the impact on U.S. export growth. The most exposed products had relatively lower export growth in 2018-2019, with larger effects in 2019. The decline in export growth in 2019Q3, for example, is equivalent to an ad valorem tariff on U.S. exports of 2% for the typical product and up to 4% for products with higher than average exposure.

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Document Object Identifier (DOI): 10.3386/w26611

 
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