US Trade Research Articles

The local effects of the first Golden Age of Globalization: Evidence from American ports, 1870–1900

AbstractThis paper uses digitized US trade flows data at the customs district level from 1870 to 1900 to investigate whether trade shocks had an effect on the size and composition of the population of US ports and on their economic activity. I find that trade increased the population of districts, driven principally by growth in urban populations, and that manufacturing activity also increased. However, these results dissipate rapidly with distance: counties adjacent to ports do not see similar gains from trade booms at nearby ports. My results imply that trade was a contributing factor in the structural transformation of America's economy.

On the Road to the Split of the American Labor Movement: Criticism of the American Federation of Labor In Committee for Industrial Organizations Pamphlets (1935–1936)

The US labor movement gained momentum after the passage of the NIRA (1933) and especially the Wagner Act (1935). The new law guaranteed employees the right to organise and bargain collectively through representatives of their own choosing. The dynamic growth in union membership was accompanied by a heated debate over whether unions should be organised to cover all workers in an industry or on an occupational or craft basis. This piece covers Committee of Industrial Organizations (CIO) pamphlets published between 1935 and 1936, a critical period in the rivalry between the American Federation of Labor (AFL) and the CIO. Most took the form of journalistic commentary on current events in the union environment. The pamphlet, as a form of communication, by definition, presents a one-sided description of reality. Nevertheless, the CIO pamphlets are a valuable source of knowledge about the division in the American labor movement in the 1930s. In this piece, I examine the axes of contention and arguments. They cover various issues, such as an assessment of the US trade union movement’s achievements, jurisdictional claims, industrial charters, and dues. I trace the evolution of radicalism in the views of the CIO leadership, from reforming the Committee in the spirit of “unionising unorganised mass production under the banner of the AFL” to massive criticism of the Federation that ultimately made further coexistence impossible. The latter resulted in the AFL suspending the CIO in September 1936.

US sanctions and the reshaping of Chinese innovation strategies

PurposeAs the China–US trade tensions escalate, the implementation of US sanctions has imposed severe restrictions on the innovation resources of Chinese firms. This study introduces the theory of peer effect to investigate whether US sanctions stimulate a homogenization of innovation strategies among Chinese companies in the same industry, thereby giving rise to an innovation peer effect.Design/methodology/approachThis study utilizes a sample of 4,078 A-share listed companies from 2015 to 2021 and employs a multi-period difference-in-differences (DID) model for analysis.FindingsThe findings indicate that US sanctions significantly stimulate innovation inputs among companies in the same industry, but concurrently, they suppress innovation outputs. Moreover, a higher degree of internationalization weakens the promotion of innovation inputs by US sanctions and amplifies the inhibitory effect on innovation outputs. A high proportion of long-term loans offsets the negative impact on innovation outputs, whereas a high proportion of short-term loans diminishes the positive impact on innovation inputs.Research limitations/implicationsThis study elucidates how external shocks impact companies’ innovation capabilities within the same industry, offering a fresh perspective on understanding the influence of China–US trade tensions on innovation among Chinese firms.Practical implicationsChinese firms should view US sanctions-induced technological challenges as opportunities, fostering breakthrough innovations through industry-academia collaboration. Balancing risk and reward is also key when navigating technological innovation and global strategies.Originality/valueThis study comprehensively reflects the impact of the US sanctions on Chinese firm innovation. It lays the foundation for analyzing the transmission mechanism of other trade policies under the framework of trade friction theory.

Operationalizing Package Treaties: A US Case Study

AbstractThis article studies the incorporation of package treaties in domestic law and administrative practice, including the functions these treaties serve once in force. This sketch of the domestic operationalization offers a window into the institutional design choices that shape how lawmakers craft the regulatory ecosystem in which flanking policies are carried out. The typology for understanding how governments situate package treaties in their domestic regulatory spaces is introduced, arguing that the ‘package’ of legally binding trade liberalization commitments and mutually agreed flanking policies is shaped by both legislative and regulatory choices that are often underestimated and overlooked. DUS trade agreements are used as a case study, finding that the US government's treatment of each of its trade agreements tends to follow a common pattern: only a small part of the agreement is transposed into domestic law; complex and robust institutions are built around the agreement to embed it deeply into the trade policy work of the executive branch; and, the entrenchment of US trade agreements has a significant enabling effect across a wide range of cross-border regulatory engagements that US agencies think of as ‘monitoring’ or ‘enforcing’, among other labels. Finally, the policy choices against the goals laid out by proponents of package treaties are assessed.

Trade under trade policy uncertainty: The moderating roles of US preferential trade agreements and their heterogenous effects

We examine the moderating role of US Preferential Trade Agreements (PTAs) in the trade effects of Trade Policy Uncertainty (TPU) using disaggregated at 2-digit product-level data from 1995 to 2020. Our analysis reveals several key insights. First, US PTAs alleviate the adverse effects of trade policy uncertainty on bilateral exports to the United States. The results indicate that exporters with no trade agreements with the US endure the full effects of TPU, while their counterparts with trade agreements experience a significant reduction in adverse effects. Specifically, we note that in the absence of any trade agreements between the US and its trading partners, the elasticity of exports to the US with respect to TPU is between−0.03 and −0.05. Second, we observe substantial heterogenous uncertainty-reducing effects of US PTAs across income groups. The moderating role of US trade agreements appears to be most effective in low-income and lower-middle-income countries, while it is non-existent for upper-middle- and high-income countries. Finally, we uncover that the content of provisions embedded in the PTAs significantly matters to the extent of the expected moderating role of PTAs. These insights contribute to the broader understanding of trade policy's role in shaping international trade patterns and offer practical implications for policymakers and trade negotiators.

Tonia Novitz, Trade, Labour, and Sustainable Development: Leaving No One in the World of Work Behind Edward Elgar Publishing, 2024 - Kevin J. Middlebrook, The International Defense of Workers: Labor Rights, US Trade Agreements, and State Sovereignty Columbia University Press, 2024

Tonia Novitz, Trade, Labour, and Sustainable Development: Leaving No One in the World of Work Behind Edward Elgar Publishing, 2024 - Kevin J. Middlebrook, The International Defense of Workers: Labor Rights, US Trade Agreements, and State Sovereignty Columbia University Press, 2024

Is US trade policy reshaping global supply chains?

This paper examines the reshaping of supply chains using detailed US 10-digit import data between 2017 and 2022. The results show that while US-China decoupling in bilateral trade is real, supply chains remain intertwined with China. Over the period, China's share of US imports fell from 22 % to 16 % as a result of US tariffs. US imports from China are being replaced with imports from large, developing countries with revealed comparative advantage in a product. In strategic industries, countries replacing China tend to be deeply integrated in China's supply chains and are experiencing faster import growth from China. Put differently, to displace China on the export side, countries must embrace China's supply chains. There is no consistent evidence of reshoring but evidence of nearshoring to border nations. Despite the significant reshaping, China remained the top supplier of directly imported goods to the US in 2022.

The end of ESG? Return spillover between ESG and non-ESG portfolios

We investigate the return spillover between firms with environmental, social and governance (ESG) and non-ESG disclosure. Using a sample of Chinese firms from 2010 to 2022, we find that the ESG portfolio return has a stronger spillover effect on the non-ESG portfolio return. Moreover, the spillover effect between the two portfolios has decreased significantly in recent years, indicating that investors recognise ESG's unique advantage. Important global events, such as stock market crashes, the Sino–US trade wars and epidemics, increase ESG spillover into non-ESG portfolios.

Using equity market reactions to infer exposure to trade liberalization

We propose a method for identifying exposure to changes in trade policy based on asset prices that has several advantages over standard measures: it encompasses all avenues of exposure, it is natively firm-level, it yields estimates for both goods and service producers, and it can be used to study reductions in difficult-to-quantify non-tariff-barriers in a way that controls naturally for broader macroeconomic shocks. Applying our method to two well-studied US trade liberalizations provides new insight into service-sector responses and reveals dramatically different outcomes among small versus large firms, even within narrow industries.

US Trade Policy, China and the World Trade Organization, written by Nerina Boschiero

US Trade Policy, China and the World Trade Organization, written by Nerina Boschiero

Trade War Between US and China

This paper examines the US-China trade war (2018-2019) and its multifaceted impact on globalization. It explores the causes of the conflict, including China's alleged unfair trade practices and the US trade deficit. The research analyzes the war's consequences on both nations, encompassing economic disruptions, job losses, and agricultural decline. Additionally, the paper investigates the impact on other countries, with some benefiting from trade diversion while others facing economic strain. Finally, the involvement of US multinational corporations (MNCs) is explored, considering their potential support for some trade war goals while opposing increased tariffs that burden their operations. Keywords: US-China Trade War, Globalization, Trade Tariffs, Unfair Trade Practices, Trade Deficit, Economic Disruptions, Job Losses, Agricultural Decline, Trade Diversion, Multinational Corporations (MNCs)

Developments in US Trade Policy Amid the Shifting Dynamics of World Trade

Today, world trade stands at a juncture. The proliferation of unconventional, unilateral trade policies calls into question the fundamental legitimacy of the World Trade Organization (WTO). To date, the global trading system evolved alongside a plethora of exogenous factors, such as the US-China competition. The political realities came to reveal the inadequacies of the existing trading regime to receive unique non-market economies (NMEs) like China in the world market. To better withstand the changes in world trade, the US resorted to unconventional, unilateral trade tactics. But how exactly did we get here? This study argues that the root cause can be found in the developments in US trade policy under each US presidency. The study’s findings demonstrate that the overarching goal of US trade policy has remained remarkably consistent across different presidencies in terms of countering the rise of China. Along the way, the incumbent president’s different priorities and political ideals, and the sustained impact of China’s accession to the WTO, induce profound changes in US-China relations and, at large, the world trading system. In short, this article aims to provide a policy-wise explanation to the current conundrum in world trade by following the developments in US trade policy since China’s accession to the WTO.

US trade policy and the US dollar

We show that the US dollar response to trade policy uncertainty (TPU) is key to assessing the impact of US trade policy. Employing structural vector autoregressive models, we find that TPU shocks supported a multilateral USD appreciation during the 2018–19 trade tensions between the US and some of its major trading partners. We rationalize this in a two-country New Keynesian model with financial frictions that links the increase in TPU to rising demand for safe USD assets. Our findings suggest that the TPU-induced appreciation of the USD in 2018–19 significantly counteracted US trade policy attempts to raise US competitiveness.

Impact of the US Indo-Pacific Strategy on China-India Economic Cooperation

India has grown to be a significant component of the US Indo-Pacific strategic layout in South Asia because of its unique geographic location, political and economic power, and other factors. Through collaborative efforts within the Indo-Pacific Economic Framework (IPEF), the US and India have fostered project cooperation by aligning policy dispositions to address shared interests and contain China. Analysis of the economic and trade interactions between China and India suggests a declining trend in their cooperation from many perspective. In a strategic move, India opted out of the China-led Regional Comprehensive Economic Partnership Agreement in 2019 to prioritize economic and trade relations in accordance with its strategic objectives. In addition, India got supports and advancements in high-tech industries through the US Indo-Pacific strategy, consequently reducing collaboration with China in this sector. Furthermore, the US and India have taken measures to diversify supply chains and explore alternative trade routes, steering away from China and promoting regional industrial transfers. This shift has prompted India to intensify its focus on developing high-tech industries to lessen its dependence on China's industrial chain supply. These initiatives have also contributed to the formation of an internal trade network within the IPEF, disrupting traditional trade exchanges between China and India. However, the economic cooperation between the US and India falls short of reaching its full potential because of differences in national interests, history, culture, and other factors. Consequently, the impact of China-India economic relations is not catastrophic, even in the face of heightened US trade restrictions on China that have compelled India to make strategic decisions.

US international trade policy: Scenarios of protectionism and trade wars

US international trade policy under both the Trump and Biden administrations has been increasingly protectionist. This paper considers two policy scenarios under active discussion: (1) an across-the-board increase in all US tariffs by 10 percentage points, and (2) a severe escalation of the US trade war with China. The scenarios are analyzed using a multi-country computable general equilibrium (CGE) simulation model of the global economy. Trade wars or policy regimes of widespread protection will increase tariffs in many sectors simultaneously and include both final goods and intermediate inputs. The impacts are complex, with a web of direct and indirect forces coming into play across domestic and international markets. The global CGE model captures these mechanisms, including both short and long-run effects, with and without retaliation by partner countries. In a world economy where the US accounts for only 10 % of global trade and potentially rival trade bloc have emerged in Europe and E&SE Asia, the US is no longer hegemonic in global markets. We find that across-the-board tariffs do not protect manufacturing jobs because the cost of imported intermediate goods increases, raising costs in manufacturing production. The US trade war with China leads to a dramatic fall in bilateral trade. Other countries expand their trade to China and the US with the exception of closely linked partners (e.g. Canada and Mexico and all countries in E&SE Asia). We find that the world economy can adjust to US trade wars, diverting trade around the US.

US trade group sees chemical growth

US trade group sees chemical growth

Policy feedback and the politics of trade agreements

Why do interest groups mobilise to change the design of international institutions? The existing research on this topic expects moments when there is a peak in political action, but generally does not consider how such peaks might impact future mobilisations. To fill this gap, this article advances an analysis that draws on policy feedback theory. It shows that the greater the preference distances surrounding existing preferential trade agreements (PTA), the more likely it is for political activity to form around prospective trade deals that share certain key commonalities with those more contentious earlier agreements. The article tests the plausibility of that argument in the design of labour provisions in US and EU trade agreements. It shows that, in the US, NAFTA (ratified 1993) introduced a model of labour provisions that was seen over the years as ‘designed to fail’. As a result, it helped mobilise labour unions against prospective PTAs that bore a resemblance to NAFTA. However, the same did not happen in the EU during the 1990s and early 2000s. This article helps connect public policy research with the literature on the politics of trade agreements. It also serves as a cautionary note to policy makers regarding the long-term effects of PTA design on political activity and underscores the need for carefully projecting the political underpinnings of the enforcement of PTA provisions.

Американский политический класс и международная повестка: общее и особенное в контексте выборов 2024 года

The article is devoted to the study of the views of politicians within the Democratic and Republican parties in the United States on the basic problems of American foreign policy. The main focus is on a comparative analysis of such problems as the current state and future of the globalization, US trade and industrial policy, boundaries of using the military force, strategy of “pivot to Asia”, relations with allies, climate change. It is concluded that although American foreign policy remains bipartisan at this stage, nevertheless, as a result of the 2024 elections, this balance may be disrupted.

Trade Dilemma of Global Hegemony: Analyzing the Transition in US Trade Policy from Globalization Deals to Hybrid Deals

This paper presents an analysis framework of the trade dilemma faced by global hegemony. It argues that maintaining global hegemony and addressing domestic conflicts simultaneously is a challenging task. Since the 1980s, the United States has prioritized the expansion of transnational capital, often at the expense of domestic vulnerable industries and the interests of low-skilled workers. This unbalanced development has led to intensified social contradictions within the United States. To resolve these conflicts, the US has shifted from reciprocal globalization deals to self-interested hybrid deals, aiming to uphold the interests of transnational capital while also addressing the concerns of workers. The negotiation experiences of the United States–Mexico–Canada Agreement (USMCA) and the Indo-Pacific Economic Framework (IPEF) demonstrate this mode of the US trade policy. While this strategy may repair the domestic political foundation, it leads to new challenges for the US, such as discontent and resistance from the international community, or encountering difficulties in promoting cooperation with US trading partners. These challenges will pose a threat to the long-term stability of the international economic order.

The impacts of the China–US trade war on China’s trade and greenfield investment

We assess the impacts of the China–US trade war on the bidirectional trade and investment flows of China. We find that China’s exports and imports both dropped sharply after the trade war began. In terms of investment flows, we find that China’s greenfield investment in the US faltered in the face of the increasing trade friction, but the impact of the trade war on the US’s greenfield investment in China is ambiguous. In addition, the trade friction only impeded the export volumes of China and had an insignificant impact on the export prices. In contrast, both the import volumes and prices for China decreased.