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Trade protection along supply chains: The negative effects of tariffs on downstream sectors
Chad Bown, Paola Conconi, Aksel Erbahar and Lorenzo Trimarchi February 2021
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Tags: globalisation; industry; employment; wages; trade; china; usa

In a world in which production processes are fragmented across countries, the effects of tariffs propagate along supply chains, with firms in downstream industries suffering from protection upstream. This column studies the effects of US antidumping duties applied against China - its most frequent target - over 1988-2016 on US firms in downstream sectors. It finds that tariffs have large negative effects on downstream industries, increasing production costs and decreasing employment, wages, sales, and investment.