Working Paper: CEPR ID: DP6486
Authors: Hylke Vandenbussche; Ziga Zarnic
Abstract: This paper empirically investigates the effects of the US safeguard protection on steel imports in 2002 on the mark-ups of EU steel producers. We identify a large panel of EU steel producers between 1995 and 2005 affected by the safeguards. Using the Roeger methodology, our results show that the protection signifcantly reduced the EU firms' mark-ups. Single-product firms suffered relatively more from the safeguards than multi-product firms. Our evidence further suggests that the US protection resulted in some diverting of the EU steel especially towards China, aggravating the situation on the Chinese steel market and ultimately resulting in the Chinese trade protection of steel imports.
Keywords: firm data; price-cost margins; safeguard measures; steel industry; trade diversion
JEL Codes: F13; L13; L61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| US safeguard protection (F52) | markups of EU firms (F12) |
| US safeguard protection (F52) | markups of single-product firms (L11) |
| US safeguard protection (F52) | markups of multi-product firms (L11) |
| US safeguard protection (F52) | diversion of EU steel exports towards China (F18) |
| diversion of EU steel exports towards China (F18) | aggravated situation in the Chinese steel market (L61) |