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Assessing the effects of tariff reform on U.S. food manufacturing industries: the role of imperfect competition and intermediate inputs

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  • Lanclos, D. Kent
  • Hertel, Thomas W.
  • Devadoss, Stephen

Abstract

Recent work indicates that the joint effects of intermediate input and final output tariff reforms on equilibrium in the differentiated final products sector are analytically ambiguous. This issue is addressed empirically for disaggregate, imperfectly competitive U.S. food manufacturing industries. The input tariff effect dominates in most industries, leading to increases in the number of U.S. firms and total industry output as a result of tariff reform. This provides evidence that the existing U.S. tariff profile discriminates against domestic food manufacturers as input tariff effects outweigh the protection offered by output tariffs. This conclusion is robust to changes in the degree of interfirm rivalry (monopolistic competition or cournot oligopoly).
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  • Lanclos, D. Kent & Hertel, Thomas W. & Devadoss, Stephen, 1996. "Assessing the effects of tariff reform on U.S. food manufacturing industries: the role of imperfect competition and intermediate inputs," Agricultural Economics, Blackwell, vol. 14(3), pages 201-212, August.
    • Handle: RePEc:eee:agecon:v:14:y:1996:i:3:p:201-212
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    1. Devadoss, Stephen, 1998. "Importance Of The Processed Food Sector For The U.S. Agricultural Industry," Research Discussion Papers 29246, Montana State University, Department of Agricultural Economics and Economics, Trade Research Center.
    2. Anania, Giovanni, 2003. "Gains from trade liberalization with imperfectly competitive world markets. A note," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 3(06), pages 1-15.
    3. Yungho Weng & Chih-Ming Hung, 2020. "Tariff escalation and de-escalation: the role of market structure," The Japanese Economic Review, Springer, vol. 71(2), pages 233-246, April.
    4. Marion Desquilbet & Hervé Guyomard, 1998. "Taxes and subsidies in vertically related markets," Post-Print hal-02283455, HAL.

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