Trump Tariff and Firm Relief: Winners and Losers from Steel Tariff Exclusion Request

40 Pages Posted: 1 Oct 2020

See all articles by Yeo Joon Yoon

Yeo Joon Yoon

Korea Institute for International Economic Policy

Wongi Kim

Chonnam National University

Date Written: April 24, 2020

Abstract

On March 2018, the Trump administration introduced 25 percent tariffs on steel and 10 percent tariffs on aluminum imports. To minimize the adverse effects of these tariffs to downstream US producers who import these products, the exclusion request that grants tariff exemptions has been also established. In this paper we examined the determinants of the authority’s decisions on the exclusion requests. Our analysis focuses on the political factors. Specifically, we ask whether companies operating business in states where Trump won the majority vote (Trump state) in the 2016 presidential election were more likely to get tariff exemptions. Our estimation result suggests that firms located in Trump states were more likely to be granted exemptions. Especially it appears that the decisions were made based on a dual standard. While firms with lower sales to employment ratios were more likely to be approved for the exclusion requests in Trump states, it was the opposite for firms in non-Trump states.

Keywords: Exclusion request, Trump trade policy, Steel tariff

JEL Classification: F13, F52

Suggested Citation

Yoon, Yeo Joon and Kim, Wongi, Trump Tariff and Firm Relief: Winners and Losers from Steel Tariff Exclusion Request (April 24, 2020). KIEP No. Working Paper 20-01, Available at SSRN: https://ssrn.com/abstract=3700752 or http://dx.doi.org/10.2139/ssrn.3700752

Yeo Joon Yoon (Contact Author)

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Wongi Kim

Chonnam National University ( email )

300 Yongbong-dong
Gwangju, Jeonnam
Korea, Republic of (South Korea)

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