The International Spillover Effects of Trade Policy Uncertainty on the Stockpiling and Destocking of US Imports
Prior to China's accession to the WTO in 2001, tariffs on Chinese products were based on an annual renewal of China's MFN status. Recent empirical evidence suggests that US importers stockpiled Chinese products to avoid the risk of high tariffs if the renewal were unsuccessful. I estimate the international spillover effects of the removal of US trade policy uncertainty on the timing of monthly US imports from the United States' major trading partners, by using product-level data at the HS 6-digit level, from 1991 to 2007. The empirical analysis finds that the removal of trade policy uncertainty alters the timing of US imports from Canada, Indonesia, Malaysia, Mexico, South Korea, Taiwan, Thailand, and the United Kingdom. Canada, Mexico, and South Korea experienced larger spillover effects in products for which they had large market shares in the United States.