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Outsourcing under Threat: Estimated Impact of Potential Tariffs on US Imports from Mexico

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  • Sorin BURNETE

    (Lucian Blaga University of Sibiu, Romania)

Abstract

In this paper, I discuss the effects of certain trade policy measures, mostly import tariffs, presently contemplated by the US government, aimed at enhancing domestic employment in a number of targeted industries. I intend to show that insofar as such measures restrain free trade among NAFTA member-countries, they run counter to a basic rule suggested by conventional theory, stating that, following changes in the tariff structure, resources will shift toward activities that enjoy the highest rate of effective protection. I try to demonstrate that erecting barriers against inside-NAFTA trade, aside from hurting industries that use outsourcing extensively, has little chances to create incentives for labor shifts in the desired direction.

Suggested Citation

  • Sorin BURNETE, 2017. "Outsourcing under Threat: Estimated Impact of Potential Tariffs on US Imports from Mexico," Expert Journal of Economics, Sprint Investify, vol. 5(3), pages 88-97.
    • Handle: RePEc:exp:econcs:v:5:y:2017:i:3:p:88-97
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    References listed on IDEAS

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    More about this item

    Keywords

    outsourcing; effective protection; labor mobility;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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