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

44 Pages Posted: 15 Jun 2020

See all articles by Kyle Handley

Kyle Handley

University of California, San Diego (UCSD) - School of Global Policy & Strategy

Fariha Kamal

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

Ryan Monarch

Board of Governors of the Federal Reserve System

Multiple version iconThere are 2 versions of this paper

Date Written: February, 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 they represent 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.

JEL Classification: F10, F13, F14, F23, H20

Suggested Citation

Handley, Kyle and Kamal, Fariha and Monarch, Ryan, Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism (February, 2020). Available at SSRN: https://ssrn.com/abstract=3625089 or http://dx.doi.org/10.17016/IFDP.2020.1270

Kyle Handley (Contact Author)

University of California, San Diego (UCSD) - School of Global Policy & Strategy ( email )

9500 Gilman Drive #0519
La Jolla, CA 92093-0519
United States

HOME PAGE: http://www.kylehandley.com

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

Board of Governors of the Federal Reserve System ( email )

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

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