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

43 Pages Posted: 6 Jan 2020

See all articles by Kyle Handley

Kyle Handley

University of Michigan, Stephen M. Ross School of Business

Fariha Kamal

Government of the United States of America - Bureau of the Census

Ryan Monarch

Federal Reserve Board

Date Written: January 2020

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 represented 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.

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Suggested Citation

Handley, Kyle and Kamal, Fariha and Monarch, Ryan, Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism (January 2020). NBER Working Paper No. w26611. Available at SSRN: https://ssrn.com/abstract=3514349

Kyle Handley (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Fariha Kamal

Government of the United States of America - Bureau of the Census ( email )

4600 Silver Hill Road
Washington, DC 20233
United States

Ryan Monarch

Federal Reserve Board ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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