Anticipation effects of protectionist US trade policies

This paper investigates the international effects of U.S. trade protection. Using micro-level data on anti-dumping, countervailing duties, and safeguards, I develop a new measure of U.S. trade policy announcement shocks for the period 1988-2015 that is free of confounding factors. Es-timates using the new measure indicate that announced, but not yet imposed, U.S. trade re-strictions give rise to contractions in major trading partners' output and investment. Counterfactual results indicate that a decline in business confidence accounts for the lion's share of these anticipation effects. A narrative analysis that quantifies the extent of newspaper coverage of U.S. trade protection shows that media attention facilitates the propagation of pro-tectionist shocks. The results are consistent with an expectations channel of trade policy. (c) 2021 Elsevier B.V. All rights reserved.