The Heterogeneous Effects of Trade Protection: A Study of US Antidumping Duties on Portland Cement
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For many traded products, high transportation and trade costs can lead to regionally segmented markets, which affect both the pattern of trade and the impact of trade policy. This paper studies the imposition of antidumping duties in the cement industry and finds striking regional variation in their impact on domestic prices, sales and imports. Duties that were imposed on Japanese producers that were shipping cement to the US West-Coast coastal markets led to imperfect substitution to other imports, which allowed domestic prices and production to increase. Imperfect substitution also occurred following duties that were imposed on Mexican producers that were shipping cement to the US Gulf of Mexico coastal markets. But in the US Southwest border markets, the same duties had no impact on the domestic prices of cement. I link the variation in responses across regions to hysteresis that was due to high exit costs.
KeywordsInternational trade Trade policy Andtidumping duties
I am grateful to Robert Staiger, Jon Levin, and Frank Wolak for their continuous guidance, invaluable advice, and encouragement. I am also indebted to Roger Noll for his feedback and assistance with obtaining essential data and to Susan Athey for her encouragement, advice and support. I am grateful to John Sweetland, George Barney, Luis Garcia, Benoit Pleska, and Hendrick G. Van Oss for sharing their extensive knowledge of the Portland cement industry.
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