IMF Working Papers

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

By Lorenzo Rotunno, Sanchari Roy, Anri Sakakibara, Pierre-Louis Vezina

December 23, 2024

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Format: Chicago

Lorenzo Rotunno, Sanchari Roy, Anri Sakakibara, and Pierre-Louis Vezina. "Trade Policy and Jobs in Vietnam: The Unintended Consequences of US-China Trade Tensions", IMF Working Papers 2024, 263 (2024), accessed December 23, 2024, https://doi.org/10.5089/9798400296895.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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.

Subject: Exports, International trade, Tariffs, Taxes, Trade tensions

Keywords: Employment, Exports, Exports, Tariffs, Trade policy, Trade tensions, US-China trade tensions, Vietnam

Publication Details

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