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  4. July 2020
  5. The Production Relocation and Price Effects of US Trade Policy: The Case of Washing Machines

The Production Relocation and Price Effects of US Trade Policy: The Case of Washing Machines

  • Aaron Flaaen
  • Ali Hortaçsu
  • Felix Tintelnot
American Economic Review
vol. 110, no. 7, July 2020
(pp. 2103-27)
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Abstract

We estimate the price effect of US import restrictions on washers. The 2012 and 2016 antidumping duties against South Korea and China were accompanied by downward or minor price movements along with production relocation to other export platform countries. With the 2018 tariffs, on nearly all source countries, the price of washers increased nearly 12 percent. Interestingly, the price of dryers—not subject to tariffs—increased by an equivalent amount. Factoring in dryer prices and price increases by domestic brands, the 2018 tariffs on washers imply a tariff elasticity of consumer prices of above one.

Citation

Flaaen, Aaron, Ali Hortaçsu, and Felix Tintelnot. 2020. "The Production Relocation and Price Effects of US Trade Policy: The Case of Washing Machines." American Economic Review, 110 (7): 2103-27. DOI: 10.1257/aer.20190611

Additional Materials

JEL Classification

  • F13 Trade Policy; International Trade Organizations
  • F14 Empirical Studies of Trade
  • F23 Multinational Firms; International Business
  • L68 Appliances; Furniture; Other Consumer Durables
  • O19 International Linkages to Development; Role of International Organizations
  • P33 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, Relations, and Aid