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Trade protectionism and US manufacturing employment

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  • Li, Chunding
  • Whalley, John

Abstract

This paper builds a numerical global general equilibrium model to simulate the effects of US-initiated trade protection measures on manufacturing employment. The simulation results show that US trade protection measures reduce manufacturing employment in the US, and these losses will further increase if trade partners take retaliation measures. Although trade protection measures can increase demand for US domestic manufactured goods because of decreased foreign demand, increased consumption prices of manufactured goods will move the demand to services. Trade partners’ retaliation measures will further decrease the demand for US manufactured goods. The whole effect is that the US loses on domestic manufacturing demand and then loses manufacturing employment.

Suggested Citation

  • Li, Chunding & Whalley, John, 2021. "Trade protectionism and US manufacturing employment," Economic Modelling, Elsevier, vol. 96(C), pages 353-361.
    • Handle: RePEc:eee:ecmode:v:96:y:2021:i:c:p:353-361
    DOI: 10.1016/j.econmod.2020.03.017
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    Cited by:

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    2. Christian Dustmann, 2021. "Trade, Labor Markets, and the China Shock: What Can Be Learned from the German Experience?," RF Berlin - CReAM Discussion Paper Series 2112, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    3. Oshodi, Ayodele Folorunso & Kilishi, Abdulhakeem Abdullahi & Muhammed, Ismail Aremu, 2021. "The Nexus between Trade Policy and Manufacturing Employment in Nigeria: A Panel Cointegrating Regression," African Journal of Economic Review, African Journal of Economic Review, vol. 10(1), December.
    4. Munisamy Gopinath, 2021. "Does Trade Policy Uncertainty Affect Agriculture?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 604-618, June.
    5. Shouxin Bai & Shicheng Zhou & Yuyao Sheng & Xingwei Wang, 2022. "Does Lockdown Reduce Employment in Major Developing Countries? An Assessment Based on Multiregional Input–Output Model and Scenario Analysis," Sustainability, MDPI, vol. 14(12), pages 1-19, June.
    6. Kreuter, Helena & Riccaboni, Massimo, 2023. "The impact of import tariffs on GDP and consumer welfare: A production network approach," Economic Modelling, Elsevier, vol. 126(C).
    7. Zhuo Chen & Bo Yan, 2022. "The impact of trade policy on soybean futures in China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(4), pages 1152-1163, June.
    8. Sanyal, Anirban, 2023. "Caught in the Crossfire: How Trade Policy Uncertainty Impacts Global Trade," EconStor Preprints 272825, ZBW - Leibniz Information Centre for Economics.
    9. Jayamaha, D.K.J.S. & Lidula, N.W.A. & Rajapakse, A.D., 2020. "Protection and grounding methods in DC microgrids: Comprehensive review and analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 120(C).

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    More about this item

    Keywords

    Trade protectionism; Manufacturing employment; United States; Numerical simulation;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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