Working Paper: CEPR ID: DP13079
Authors: Chad P. Bown
Abstract: How does trade policy treat intermediate inputs relative to other imported products? Slow economic and trade growth during the recovery from the Great Recession, as well as recent political developments in the United Kingdom and United States, pose a threat to cross-border supply chains and have thus brought this question to the forefront of policy circles. This paper investigates by examining new and detailed data on Group of 20 (G20) trade policy use through 2016, with a special emphasis on changes in policymaking behavior since 2010. First, there is no evidence that the G20 economies made significant changes to their applied import tariffs during this period. However, there has been a modest increase in import protection arising through other policy instruments of note such as the temporary trade barriers (TTBs) of antidumping, countervailing duties and safeguards. More importantly, there is evidence of changes in how countries have applied their TTBs. TTBs were increasingly imposed on imports not only from China, but also on imports from other countries, reversing a post-2001 trend. Furthermore, TTB protection has moved away from imports of final goods and toward imports of intermediate inputs. These shifts in policy have several potential contributing causes as well as economic consequences, including for cross-border supply chains.
Keywords: Antidumping; Safeguards; Temporary Trade Barriers; Tariffs; WTO; Supply Chains; Intermediate Inputs
JEL Codes: F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increasing application of TTBs on intermediate inputs (D57) | negatively impact trade flows (F69) |
| modest increase in import protection through TTBs targeting intermediate inputs (F13) | shift in policy focus (O24) |
| TTBs imposed on imports from countries beyond China (F19) | reversing previous trend (P27) |
| TTB protection widening (F38) | more intermediate inputs facing barriers compared to final goods (L60) |