The downstream impact of upstream tariffs: Evidence from investment decisions in supply chains

• Main Authors: MARTIN, Thorsten, OTTO, Clemens A.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: Import Tariffs; Investment; International Supply Chains; Trade in Intermediate Inputs; Finance and Financial Management; Operations and Supply Chain Management
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/7265; https://ink.library.smu.edu.sg/context/lkcsb_research/article/8264/viewcontent/the_downstream_impact_of_upstream_tariffs_evidence_from_investment_decisions_in_supply_chains.pdf
• Institution: Singapore Management University

We study how US manufacturing firms' investment responds to tariff reductions in supplier industries. Our estimates, based on tariff reductions following multinational trade agreements, suggest that a hypothetical 10% reduction of all upstream tariffs would increase downstream investment by 4%...