The Trade Effects of Temporary Trade Barriers Over Their Life Cycle

Temporary trade barriers (TTBs) in the form of antidumping, countervailing and safeguard duties are the most commonly used policy instruments to counteract surges in imports. Using a theory-consistent structural gravity model, this paper investigates for the first time at the product level (HS 6-digit) how the trade effects of these measures vary over their entire life cycle. Employing a cross-country dataset over the period 1995 to 2023, I find that product-level imports from exporters targeted with TTBs are significantly elevated during the pre-investigation period and remain so during the WTO-required investigation to justify these duties. When imposed, TTB tariffs lower imports on average by 24 percent while final duties are in place, but there are only modest negative effects on imports during the preliminary duty phase. The negative import effects intensify with the duration of the final duties. Average price increases are significant but modest during the final duty phase, indicating a limited effectiveness of TTBs to provide protection in the form of higher profit opportunities for import-competing industries. While focusing on TTBs, the estimates in this paper offer detailed insights on how tariff changes more generally affect the trading behavior and market conditions for domestic and foreign firms.