Trade Policy and Jobs in Vietnam: The Unintended Consequences of US-China Trade Tensions

Author: Lorenzo Rotunno, Sanchari Roy, Anri Sakakibara, and Pierre-Louis Vezina

Trade Policy and Jobs in Vietnam

Volume/Issue: Volume 2024 Issue 263

Publication date: December 2024

ISBN: 9798400296895

$20.00

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Topics covered in this book

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Exports and Imports , Taxation - General , Tariffs , Trade tensions , Exports , Vietnam , US-China trade tensions , trade policy , exports , employment

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Summary

We use the US-China tariffs of 2018-19 as an exogenous shock to export opportunities in Vietnam to identify how trade policy affects job creation. Using a difference-in-differences framework, we first show that US tariffs on China increased the range of products exported by Vietnam to the US in the two years after the hikes. We then show using firm level data that this expansion in export opportunities led to job creation. Around 5% extra jobs were created in firms hit with average tariffs above 15%. Results point towards this effect being driven mostly by female employment.