When Tariffs Disturb Global Supply Chains

Grossman, Gene M.; Helpman, Elhanan

doi:10.2139/ssrn.3679715

Cited by 11 publications

(14 citation statements)

References 28 publications

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“…Reshoring and shortening supply chains is part of this re-evaluated supply chain risk management. Also, governments could step in if firms do not take into account the social costs involved of supply chain disruptions (Grossman and Helpman, 2020). This could also result in shorter and less risky supply chains.…”

Section: Globalisation and Slowbalisationmentioning

confidence: 99%

Tasks, occupations and slowbalisation: on the limits of fragmentation

Brakman

Marrewijk

2022

Cambridge Journal of Regions, Economy and Society

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Following the trade collapse in 2009, Globalisation has recovered but the growth rate slowed down compared to the preceding period of Hyper Globalisation. The persistence of this slowdown is remarkable. We argue that increased awareness of firms for the costs of involvement in global supply chains can explain the recent developments in trade flows. We formalise the existence, length and consequences of changes in fragmentation cost along global supply chains. From a theoretical point of view, we allow tasks to be a combination of different occupations while the model endogenises production fragmentation, allowing for multiple production stages in multiple countries, while remaining tractable. From an empirical point of view, the model explains both the period of Hyper Globalisation and the subsequent Slowbalisation in terms of changing fragmentation costs along global supply chains. The model is also consistent with developments regarding labour market polarisation associated with modern globalisation: the labour market position of medium-skilled workers in advanced countries has deteriorated relative to high- and low-skilled workers, which can be understood by changing global supply chains. Our model implies, however, that even with zero fragmentation costs the demand for certain occupations does not fall to zero for any country.

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Section: Globalisation and Slowbalisationmentioning

confidence: 99%

Tasks, occupations and slowbalisation: on the limits of fragmentation

Brakman

Marrewijk

2022

Cambridge Journal of Regions, Economy and Society

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“…7 Recent papers also study the effects of input tariffs in frameworks with relational GVCs and incomplete contracts (Ornelas and Turner, 2008;Antràs and Staiger, 2012;Ornelas and Turner, 2012;Grossman and Helpman, 2020).…”

Section: Introductionmentioning

confidence: 99%

Trade Policy and Global Sourcing: An Efficiency Rationale for Tariff Escalation

Antràs¹,

Fort²,

Gutiérrez³

et al. 2022

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“…Our main contribution to this literature is to characterize analytically the role of bilateral oligopolies and firm granularity for the intensive-margin pass-through elasticity of an exporter's cost shock to the negotiated price. Related to our paper is a recent work by Grossman and Helpman (2020), who develop a bargaining framework of firm-to-firm trade to study the e↵ect of tari↵ shocks on the organization of supply chains. We see our work as complementary to theirs: While abstracting from the extensive margin channel, our model captures rich(er) pricing and pass-through patterns by allowing for both twosided market power and granularity.…”

Section: Introductionmentioning

confidence: 99%

“…Both the theoretical discussion, and estimation strategy can be easily extended to this case.7 The assumption of Nash-in-Nash bargaining is standard in applied studies of bilateral oligopolies, see, e.g., Collard-Wexler et al (2019) for a discussion. See alsoGrossman and Helpman (2020) for a recent application in the context of global value chains.8 Below, we discuss how the model can we extended to allow the possibility of renewed search to a↵ect the players' outside options.…”

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confidence: 99%

Two-Sided Market Power in Firm-to-Firm Trade

Alviarez¹,

Fioretti²,

Kikkawa³

et al. 2021

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Firms in global value chains (GVCs) are granular and exert bargaining power over the terms of trade. We show that these features are crucial to understanding the well-established variation in prices and pass-through across importers and exporters. We develop a novel theory of prices in GVCs, which tractably nests a wide range of bilateral concentration and bargaining power configurations. We test and evaluate the models predictions using a novel dataset merging transaction-level U.S. import data with balance sheet data for both U.S. importers and foreign exporters. Our pricing framework enhances traditional frameworks in the literature in accurately predicting price changes following a tariff shock. The results shed light on the role of firms in determining the tariff pass-through onto import prices.

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When Tariffs Disturb Global Supply Chains

Cited by 11 publications

References 28 publications

Tasks, occupations and slowbalisation: on the limits of fragmentation

Tasks, occupations and slowbalisation: on the limits of fragmentation

Trade Policy and Global Sourcing: An Efficiency Rationale for Tariff Escalation

Two-Sided Market Power in Firm-to-Firm Trade

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