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Import Liberalization as Export Destruction? Evidence from the United States

Author

Listed:
  • Holger Breinlich
  • Elsa Leromain
  • Dennis Novy
  • Thomas Sampson

Abstract

In trade models with scale economies, import liberalization reduces exports within industries by shrinking real market potential. We find this export destruction mechanism reduced US export growth following the permanent normalization of trade relations with China (PNTR). There was also an offsetting boost to exports from lower input costs. We use our estimates to calibrate a quantitative model and show that scale economies are economically important for trade policy analysis. Although PNTR increased aggregate US exports relative to GDP, exports declined in the most exposed industries. US gains from PNTR are positive but 30 percent smaller than under constant returns.

Suggested Citation

  • Holger Breinlich & Elsa Leromain & Dennis Novy & Thomas Sampson, 2026. "Import Liberalization as Export Destruction? Evidence from the United States," American Economic Journal: Macroeconomics, American Economic Association, vol. 18(3), pages 77-111, July.
    • Handle: RePEc:aea:aejmac:v:18:y:2026:i:3:p:77-111
    DOI: 10.1257/mac.20230213
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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