---
title: "What Did the 2018 Tariffs Do to US Supply Chains? Firm-Level Evidence"
date: 2026-08-03
updated: 2026-08-03
tags: [tariff, supply chain, US-China trade war, global sourcing, economics]
canonical: https://www.fernandogreve.com/blog/2026-08-03-tariffs-leadtime-global-sourcing
---
# What Did the 2018 Tariffs Do to US Supply Chains? Firm-Level Evidence

*Updated: 2026-08-03*

> **TL;DR:** In a working paper with Marcelo Villena, we study how the US tariffs imposed on China during 2018Q3 changed the operations of multinational US importers. Using transaction-level import data at the shipment level (2015–2019) and a difference-in-differences design, we find the tariff war caused firms to add about 1.5 more source countries, cut supply from their main source country by 0.3%, and increase lead time by 0.4%.

## Why focus on 2018Q3?

During the third quarter of 2018, the Trump administration imposed **three waves of import tariffs** on Chinese goods — July 6, August 8, and September 18 — covering approximately **$250 billion of US imports at rates between 10% and 50%**, following the USTR's Section 301 investigation into technology transfer and intellectual property practices. That concentration of a sharp rate increase in a brief window is what makes the episode attractive econometrically: it behaves like a policy shock. We use data between 2015 and 2019 to keep the COVID-19 pandemic out of the sample.

In the aggregate, import values of tariffed products fell **25–30%** after imposition, implying at least **$136 billion of trade was redirected** (Alfaro & Chor, 2023) — a substantial shock to global supply chains.

## What does the paper measure?

[The paper](/publications/tariffs-leadtime-performance-global-sourcing) works with **transaction-level import data at the shipment level** for imports into the United States. That granularity lets us see, for each importer, where cargo comes from, how sourcing shifts over time, and how long shipments take — rather than inferring from country aggregates.

## What did we find?

- **Diversification:** companies reduced the share of imports from China and increased imports from other Asian countries such as **India and Vietnam**, and from North American partners such as **Canada and Mexico**.
- **Causal estimates (difference-in-differences):** the tariff increase produced about **1.5 additional source countries** per importer, a **0.3% reduction in supply from the main source country**, and a **0.4% increase in lead time**.
- **Performance:** alongside longer lead times, we observe a negative effect on the companies' financial results.

## Why does this matter?

Diversifying away from a dominant supplier country buys resilience, but it is not free: more sources mean longer, more complex logistics, and the data show that cost showing up in lead times and performance. This connects to my related work on [the environmental side of the same restructuring](/publications/us-china-trade-war-environment).

The full text, citation, and BibTeX are on the [publication page](/publications/tariffs-leadtime-performance-global-sourcing).

*Section: Research*
*Tags: tariff, supply chain, US-China trade war, global sourcing, economics*