ONLINE: When Tariffs Disrupt Global Supply Chains

12.04.2021 16:00 – 17:15


(Joint with Elhanan Helpman)


We study unanticipated tariffs on imports of intermediate goods in a setting with firm-to-firm supply relationships. Firms that produce differentiated products conduct costly searches for potential input suppliers and negotiate bilateral prices with those that pass a reservation level of match productivity. Global supply chains are formed in anticipation of free trade. Once they are in place, the home government surprises with an input tariff. This can lead to renegotiation with initial suppliers or new search for replacements. We identify circumstances in which renegotiation generates improvement or deterioration in the terms of trade. The welfare implications of a tariff are ambiguous in this second-best setting, but plausible parameter values suggest a welfare loss that rises rapidly at high tariff rates.


Bâtiment: IHEID

Webinar GTDW

Organisé par

Faculté d'économie et de management
Institute of Economics and Econometrics


Gene Grossman, Prof. Princeton University

entrée libre (inscription requise)


Catégorie: Séminaire


Date limite d'inscription: 09.04.2021


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