Working Papers

Trade Policy Uncertainty and Supply Chain Disruptions: Firm-Level Evidence from "Liberation Day," with Gustavo De Souza, Ziho Park, and Yulin Wang, SSRN

Abstract: On April 2, 2025, U.S. President Donald Trump announced the “Liberation Day” tariffs, creating an unexpected, precisely timed, and country-specific episode of trade policy uncertainty. The proposal threatened U.S. trade partners with additional tariffs ranging from 10% to 50%, depending on the outcome of bilateral negotiations. Using transaction-level U.S. import data, we find that firms rapidly shifted sourcing from countries facing high tariff risk to those facing low tariff risk. Firms didn’t change their total import values but this reallocation came at the cost of higher import prices. Firms with relationship-sticky, contract-dependent, and trade finance-intensive supply chains drove this preemptive reallocation, consistent with their being most vulnerable had tariffs been implemented before they could reallocate. Our findings demonstrate that even brief periods of trade policy uncertainty can significantly disrupt supply chains.

Industrial Policy and Retaliatory Protection under the WTO: Lessons from China, with Yusheng Feng, Siwei Wang, Min Zhu, SSRN

Abstract: Using Chinese firm-level trade data combined with global anti-dumping (AD) and countervailing duty (CVD) investigations, we uncover a previously overlooked cost of industrial policy under WTO agreements. At every stage of AD/CVD investigation,  subsidies significantly raise the probability of affirmative tariff rulings and lead to higher imposed tariffs. Firms that received larger subsidies are also less likely to be granted firm-specific duties, which are lower than the product-level duties applied to all other firms exporting the investigated product. While AD/CVD duties create a moderate trade barrier that an average Chinese firm expects to face, they represent a significant cost of subsidy for those heavily subsidized and those potentially receiving firm-specific duties. The intended benefits of industrial subsidies are partially offset by increased foreign trade protection: AD/CVD duties induced by subsidies reduced the subsidy effect on firm revenue growth by 22%.

Robots, Tools, and Jobs: Evidence from Brazilian Labor Markets, with Gustavo de Souza, CESifo WP. Revise and Resubmit at Review of Economic Studies

Abstract: What is the effect of robots and tools on employment and inequality? Using natural language processing and an instrumental variable approach, we discover that robots have led to a sizable decrease in the employment and wages of low-skill workers in operational occupations. However, tools - machines that complement labor – have led to an equally large reinstatement of these workers, increasing their employment and wages. Using a quantitative model, we find that the lower prices of robots and tools over the last 20 years have reduced inequality and increased welfare without a significant effect on employment. 

To Comply or Not to Comply: Understanding Neutral Country Supply Chain Responses to Russian Sanctions, with Zhi Li, Ziho Park, Yulin Wang, and Jing Wu, SSRN

Abstract: Using transaction-level trade data from major non-sanctioning countries, we study how firms responded to export sanctions against Russia since 2022. Firms headquartered in sanctioning countries reduced their sanctioned exports, highlighting  multinationals' geopolitical influence. However, domestically headquartered firms increased their sanctioned exports. Domestic firms with higher exports to sanctioning countries showed better compliance, underscoring the importance of limiting violators' market access. In contrast, firms sourcing more inputs from sanctioning countries rerouted sanctioned products to Russia. Sanctioning multinationals expanded exports to both sanctioning and Russia-friendly countries, blending compliance and evasion. Stronger secondary sanctions and multinational involvement are essential for future success of sanctions.

The Employment Consequences of Anti-Dumping Tariffs: Lessons from Brazil, with Gustavo de Souza, CESifo WP. More Revisions Requested at Review of Economics and Statistics

Abstract: Can anti-dumping tariffs increase employment? To answer this question we compile data on all anti-dumping (AD) investigations in Brazil, matched to firm-level administrative employment information. Using difference-in-differences, we estimate the effect of AD tariffs on trade, the national supplier and sectors linked to it. As response to an AD tariff, imports decrease while the protected sector increase employment. Moreover, downstream firms decrease employment by more than the employment gain of the national producer while upstream ones dramatically increase it. To quantify the aggregate effect of these tariffs, we build a quantitative model with international trade, input-output linkages and labor force participation. The model can reproduce the micro-elasticities we found and aggregate moments of the Brazilian economy. We show that the Brazilian AD policies increased employment by 0.04%, GDP by 0.04%, but decreased welfare by 0.09%.