Global supply chains are a pervasive feature of the modern production landscape and a potentially important channel of transmitting shocks across locations. Thus, quantifying the impacts of trade shocks requires understanding how firms adjust their global supply chains. Our proposal leverages detailed information about buyer-supplier relationships in U.S. import transactions to quantify how the margins of global sourcing respond to shocks (primarily tariffs and natural disaster risk). We build on and deploy our existing data infrastructure from Handley, Kamal and Monarch (2020), hereafter HKM, where 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.
In HKM, we map firm-level global supply chains into product-level measures of exposure to the 2018-2019 U.S. import tariff increases. We construct measures of exporters facing new import tariffs on their imports using detailed import and export transaction records. We link these measures with contemporaneous, public-use monthly trade flows to find that supply chain spillovers from the import tariffs dampened U.S. export growth over 2018-2019.
This research proposal, using newly available firm-transactions linked data, delves deeper into firm-level responses using country and product level import growth measures that parsimoniously summarize the intensive and extensive margins of sourcing. We focus primarily on the (plausibly) exogenous variation in import tariffs from the 2018-2019 U.S. tariff war against China and other countries. We use this policy shock to analyze heterogeneity in the response of U.S. firms' imports across countries, product characteristics and substitutability, and organizational structure.
the US Department of Homeland Security through a subaward from the Cross-Border Threat Screening and Supply Chain Defense (CBTS), a Department of Homeland Security Center of Excellence, at Texas A&M University grant #I8STCBT00001