Trade Protection Along Supply Chains

75 Pages Posted: 11 Feb 2021 Last revised: 9 Nov 2021

See all articles by Chad P. Bown

Chad P. Bown

Peterson Institute for International Economics; Centre for Economic Policy Research (CEPR)

Paola Conconi

Centre for Economic Policy Research (CEPR); Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Aksel Erbahar

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Tinbergen Institute

Lorenzo Trimarchi

University of Namur

Multiple version iconThere are 2 versions of this paper

Date Written: January 2021

Abstract

During the last decades, the United States has applied increasingly high trade protection against China. We combine detailed information on US antidumping (AD) duties â?? the most widely used trade barrier â?? with US input-output data to study the effects of trade protection against China along supply chains. To deal with endogeneity concerns, we propose a new instrument for AD duties, which combines exogenous variation in the political importance of industries across electoral terms with their historical experience in AD proceedings. We estimate the effects of protection on directly exposed and indirectly exposed (downstream and upstream) industries. We find that AD duties have a net negative impact on US jobs: they reduce employment growth in downstream industries, with no significant effects in protected and upstream industries. We provide evidence for the mechanisms behind the negative effects of protection along supply chains: AD duties decrease imports and raise prices in protected industries, increasing production costs in downstream industries.

Suggested Citation

Bown, Chad P. and Conconi, Paola and Erbahar, Aksel and Trimarchi, Lorenzo, Trade Protection Along Supply Chains (January 2021). CEPR Discussion Paper No. DP15648, Available at SSRN: https://ssrn.com/abstract=3783883

Chad P. Bown (Contact Author)

Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Paola Conconi

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium
32 2 650 2345 (Phone)
32 2 650 4475 (Fax)

Aksel Erbahar

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Lorenzo Trimarchi

University of Namur ( email )

8 rempart de la vierge
Namur, 5000
Belgium

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