Supply chain adjustments to tariff shocks: Evidence from firm trade linkages in the 2018-2019 U.S. trade war

Kyle Handley, Fariha Kamal, Ryan Monarch

Research output: Contribution to journalArticlepeer-review

Abstract

We use the 2018-2019 U.S. trade war to examine how supply chains adjustments to a tariff cost shock affect imports. Using confidential trade data, we show that the decline in U.S. imports of tariffed goods during the trade war was driven primarily by the exit of firms from import markets, discontinued buyer–supplier relationships, and reduced entry into importing. However, tariffed products where imports were concentrated in fewer suppliers exhibited smaller declines in import growth.

Original languageEnglish (US)
Article number112009
JournalEconomics Letters
Volume244
DOIs
StatePublished - Nov 2024

Keywords

  • Global supply chains
  • Strategic products
  • Tariffs
  • Trade war

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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