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on International Activities of Firms |
| By: | Banri ITO; Naoto JINJI; Megumi NAOI |
| Abstract: | This study uses an original firm-level survey fielded during the Trump 2.0. negotiations to examine how firm characteristics relate to (i) whether and how strongly firms perceive tariff impacts and (ii) whether and how they adjust (including measures under consideration). Impacts are widespread among U.S. exporters and are largest for firms engaged in related-party (intrafirm) exports, consistent with rigid internal transactions and compliance constraints (e.g., rules of origin, pricing, regulation). Among firms with limited direct exposure to North America, more upstream firms report stronger impacts, suggesting supply-chain spillovers beyond direct exports. Adjustments are more selective, rising with firm size, and are most advanced among large, high-productivity firms. Adjustment menus differ by exposure, with intrafirm exporters favoring U.S. localization via foreign direct investment, arms-length exporters relying more on price/cost adjustments, and China/Asia exporters shifting toward third-country markets. Policy should lower export-related fixed costs for smaller firms and expand support for third-country expansion. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26035 |
| By: | Marina Azzimonti; Jacob Titcomb |
| Abstract: | This paper analyzes the effect of the 2025 U.S. import tariffs on import prices and local labor-markets. To that end, we use highly disaggregated customs data to construct realized tariff rates from actual duty collections, rather than announced statutory schedules. An important contribution is that we document a large and persistent gap between the two measures, driven by within-country product reallocation, cross-country sourcing shifts, and implementation frictions. This implies that statutory rates are a poor proxy for the trade shock that firms actually faced. Using realized tariffs, we find that pass-through of realized tariffs into import prices was close to one hundred percent, with negligible adjustment by foreign exporters and a significant reduction in import quantities. When we examine local labor-market consequences of the increase in import tariffs, we find that counties which are more exposed to import-competing sectors experienced small declines in unemployment and that rising input costs weighed marginally on labor-force participation. Both effects, though heterogeneous across space, are economically negligible. In contrast to the 2018–2019 tariff episode, where rising input costs dominated, resulting in lower manufacturing employment, the 2025 tariffs did not generate large labor-market changes in either direction. |
| Keywords: | Employment and labor markets; trade and international economics |
| JEL: | F1 F16 |
| Date: | 2026–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedrwp:103055 |
| By: | George Cui; Kailin Gao |
| Abstract: | We employ novel data and theoretical frameworks to investigate how a social media platform facilitates information exchange among firms. Our analysis is based on an extensive dataset comprising over 20 million firm-to-firm online interactions on a prominent social platform where participants share information about international trade. We document four empirical patterns. First, we find that firms’ exports grow significantly after the firm begins using the social media platform. Second, firms located geographically closer exchange more information. Third, firms in sectors that have stronger production network relationships interact more on the platform. Finally, firms in more developed regions are more likely to adopt the social media platform. Motivated by these empirical patterns, we develop a quantitative general equilibrium trade model with information frictions and endogenous learning and information sharing. |
| Keywords: | Information; Global Value Chains; Online Platforms |
| Date: | 2026–04–03 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/064 |
| By: | Robert C. M. Beyer; Mr. Hui Tong; Xinbei Zhou |
| Abstract: | This paper investigates how the 2025 U.S. trade-policy shocks propagated to global equity valuations. Country-level studies have documented the aggregate costs of tariffs and uncertainty, but firm-level evidence on their joint role after the 2025 shocks remains limited. Filling this gap, we use a firm-level event-study design to disentangle a trade-exposure channel from a sensitivity-to-uncertainty channel. Firms with greater U.S. trade exposure and higher uncertainty sensitivity experienced the sharpest valuation declines following the initial tariff announcement on April 2, but also the strongest rebounds after the announced pause and subsequent trade agreements. Both channels are economically meaningful and of similar magnitude, and jointly account for a substantial share of the market response. Together, they represent about 20 percent of the stock-price decline among tradable firms after April 2 and about 10 percent of the rebound after trade agreements. Overall, the findings show that trade policy affects firms not only through expected tariff costs, but also by reshaping policy predictability in ways that affect firms’ investment incentives. |
| Keywords: | tariffs; trade exposure; uncertainty; corporate market valuations |
| Date: | 2026–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/070 |