Winners and Losers: An empirical study on the employment effects of the 2018 tariffs imposed by the first Trump administration

Sammanfattning

This thesis investigates the mid-term employment effects of the 2018 U.S. tariff escalation under the first Trump administration. While the tariffs were introduced to protect domestic industries and “bring back jobs,” their actual labor market impacts remain uncertain. While previous research focuses on short-term effects or isolated industries, this thesis takes a broader perspective by examining three distinct groups: protected sectors, downstream industries reliant on imported inputs, and industries targeted by foreign retaliation. Using industry-level panel data from 2014 to 2023 and fixed effects regressions with lagged controls, the analysis provides a more nuanced assessment of employment effects within each group. The results show no statistically significant employment gains in protected sectors, but significant negative effects in downstream and retaliation-affected industries. These findings suggest that tariffs are an ineffective tool for promoting employment growth in a highly automated and globally integrated economy.