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  5. Trade, Uncertainty and Global Prosperity
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Trade, Uncertainty and Global Prosperity

Paper Session

Saturday, Jan. 3, 2026 2:30 PM - 4:30 PM (EST)

Philadelphia Marriott Downtown, Room 501
Hosted By: Association of Christian Economists
  • Chair: Michael Anderson, Washington and Lee University

Navigating Choppy Waters: How U.S. Trade Policy Uncertainty Affects Small Businesses

Ebehi Iyoha
,
Harvard Business School
David Atkin
,
Massachusetts Institute of Technology
Zoe Cullen
,
Harvard Business School

Abstract

This paper explores the impact of recent changes in the US trade policy environment on small businesses. Drawing on a survey of more than 4,000 small businesses conducted between March 22 and 31, 2025, we examine firms’ knowledge, expectations, and decisions during a period of substantial trade policy uncertainty. Our findings reveal widespread knowledge gaps about current tariffs, even among internationally exposed firms. Most businesses expect continued policy uncertainty throughout 2025, anticipate reduced sales and increased costs, face limited options for mitigating tariff-induced cost increases, and do not expect government assistance in facilitating adaptation. These results highlight the vulnerability of small businesses, which represent a significant share of US economic activity, to rapid trade policy changes and suggest the need for clear policy communication and targeted support mechanisms.

Estimating the General Equilibrium Effects of Critical Minerals Export Restrictions

Tricia Mueller
,
Charles River Associates
Alan K. Fox
,
US International Trade Commission
Samantha Schreiber
,
US International Trade Commission

Abstract

This paper explores the global economic impacts of export restrictions on critical minerals. Using a structural model, we consider how export restrictions impact the price of minerals and the price of goods in downstream sectors. We use data from the Global Trade Analysis Project Circular Economy (GTAP-CE) database in conjunction with the OECD Inventory of Export Restrictions on Industrial Raw Materials to estimate the impacts of critical minerals trade restrictions. Using a Chilean tax on copper exports, we demonstrate how Chile’s policy impacts both upstream copper production and downstream sectors. We then compare the results of the structural model to the predictions of the GTAP model itself to illustrate the importance of capturing features of the mining sector in analyzing the impact of critical minerals policies.

General Trade Policy Uncertainty and the Participation of Brazilian Firms in Foreign Markets

Peri de Silva
,
Kansas State University
Bruno Cesar Araujo
,
IPEA
Lourenco Paz
,
Baylor University

Abstract

In this paper we utilize restricted use Brazilian customs data to investigate the effects of trade policy uncertainty on the export decisions of Brazilian firms. We examine the policy uncertainty stemming from nontariff measures, tariff waters (or tariff overhang), and anti-dumping duties. Our estimates indicate that uncertainty from tariff waters reduce the export probability while the effects of nontariff and anti-dumping measures are more nuanced. Both reduce the probability of export of new entrants into the markets enacting those measures. Yet, they foster the entry of Brazilian firms into third markets.

Estimating Trade Re-Routing versus Trade Re-Location Using Night Lights Data

Van Hoang Pham
,
Baylor University
William Blake
,
Baylor University

Abstract

The 2018-2019 U.S.-China trade war created two effects: trade re-routing (shifting export flows without relocating production) and actual production re-location from China. This study uses remote-sensing data to quantify the relative contributions of these two channels to the growth in exports from Vietnam to the U.S.. We exploit VIIRS nighttime lights data as a proxy for economic activity to distinguish between genuine production shifts and pure trade re-routing. Using pre-tariff data, we estimate province-level elasticities between export flows and nighttime light intensity. These baseline relationships allow us to predict expected export levels based on observed changes in lights intensity following tariff implementation. We interpret lights-predicted exports as evidence of production re-location, while the residual between actual and predicted exports captures trade re-routing activities. Preliminary findings reveal substantial heterogeneity across Vietnamese regions: the Red River Delta, Mekong Delta, Southeast, and South Central Coast experienced marked increases in nighttime lights intensity during 2017-2018, followed by stabilization in 2018 and renewed growth through 2019-2020. Our approach provides the first satellite-based decomposition of trade diversion mechanisms and offers an alternative to using survey-data to understand supply chain responses to trade policy shocks.

Discussant(s)
Judy Dean
,
Brandeis University
Van Hoang Pham
,
Baylor University
Lourenco Paz
,
Baylor University
Stephen L.S. Smith
,
Hope College
JEL Classifications
  • F1 - Trade
  • R1 - General Regional Economics