The Effect of Tariffs in Global Value Chains
IMF Working Papers, February 25, 2022
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- The Effect of Tariffs in Global Value Chains
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Bibliographic details
- Authors: Johannes Eugster, Florence Jaumotte, Margaux MacDonald, Roberto Piazza
- Published: February 25, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400201158.001
Summary
- This paper empirically investigates the impact of tariffs when production is organized in global value chains.
- Using global input-output matrices, the authors construct four different tariff measures that capture the direct and indirect exposure to tariffs at different stages of the production chain for a broad set of countries and industries.
- The paper relates to recent innovations in theoretical gravity models and provides an empirical assessment of possible long-term effects of recent trade tensions.
- Publication date: February 25, 2022.
- Authors: Johannes Eugster, Florence Jaumotte, Margaux MacDonald, Roberto Piazza.
- Series: Working Paper No. 2022/040; Volume: 2022; Issue: 040; Pages: 33.
- DOI: https://doi.org/10.5089/9798400201158.001
- ISBN: 9798400201158
- ISSN: 1018-5941
- Stock No: WPIEA2022040
Methodology: Tariff measures and data
- Data source: global input-output matrices (used to construct tariff exposure measures).
- Constructed four different tariff measures to capture:
- direct exposure to tariffs,
- indirect exposure at different stages of the production chain,
- exposure higher up in the value chain,
- exposure further down in the value chain.
Key empirical findings
- Tariffs have significant effects on economic outcomes, including on countries and sectors not directly targeted.
- Tariffs higher up and further down in the value chain depress:
- value added,
- employment,
- labor productivity,
- total factor productivity,
to varying degrees.
- There are no benefits found for the sector that enjoys additional protection.
- Some evidence of economic activity being diverted:
- positive effects on value added and employment from tariffs imposed on competitors.
Subject areas and keywords
- Subject: Exports, Imports, International trade, Labor productivity, Production, Tariffs, Taxes, Total factor productivity.
- Keywords: effect of tariff, employment from tariff, Exports, Global, global value chains, IMF working paper research Department, Imports, Labor productivity, productivity, tariff measure, tariff war, Tariffs, Tariffs, Total factor productivity, upstream tariff, value added.
Source: IMF Working Papers — "The Effect of Tariffs in Global Value Chains", Working Paper No. 2022/040, February 25, 2022.
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- Working Paper