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Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector
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Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector

Aaron Flaaen and Justin Pierce
Federal Reserve Board, 2019
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Editorial Rating

7

Qualities

  • Analytical
  • For Experts
  • Hot Topic

Recommendation

The tariff feud between the United States and China provides a unique window through which scholars can assess the wider effects of trade levies in economies interlinked through global supply chains. In their erudite study for executives and analysts, economists Aaron Flaaen and Justin Pierce find that US tariffs have so far failed to protect domestic industries, as input costs have risen and China’s retaliatory efforts have counteracted any hoped-for benefits.

Take-Aways

  • Three escalating events ramped up the trade skirmishes between the United States and China over the course of 2018.
  • Tariffs affect the US manufacturing sector through three distinct channels.
  • The trade levies have produced overall negative results in the US manufacturing sector. 

About the Authors

Aaron Flaaen and Justin Pierce are economists at the Federal Reserve Board.

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