Working Paper: CEPR ID: DP15648
Authors: Paola Conconi; Chad P. Bown; Aksel Erbahar; Lorenzo Trimarchi
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 – the most widely used trade barrier – 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.
Keywords: trade protection; supply chains; input-output linkages
JEL Codes: F13; D57
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| AD duties (E00) | employment growth in downstream industries (L79) |
| AD duties (E00) | employment growth in protected industries (O25) |
| AD duties (E00) | employment growth in upstream industries (L79) |
| average input tariff (F14) | employment growth in industry (L89) |
| AD duties (E00) | imports (F14) |
| AD duties (E00) | prices in protected industries (L11) |
| prices in protected industries (L11) | production costs in downstream industries (L69) |
| AD duties (E00) | job loss in US economy (F66) |