U.S.-China Trade War Tariff Shocks and Manufacturing Employment: Commuting Zone Exposure, Import Competition, and Retaliatory Tariff Pass-Through 2018-2023

This study investigates causal effects of U.S. Section 301 tariff shocks on manufacturing employment and wages in commuting zones with high Chinese import exposure, and Chinese retaliatory tariff pass-through to agricultural sectors within the context of international economics and labor economics, an area of growing scientific importance given its implications for U.S. trade policy design for Section 301 renewal, agricultural trade adjustment assistance, and commuting zone economic resilience metrics. Using 2SLS regression using Bartik instrument (pre-2018 industry employment share x tariff rate change) for endogenous tariff exposure; event study around 2018 tariff announcement; synthetic control for agricultural counties, we examine U.S. tariffs on Chinese imports reducing import competition in exposed manufacturing sectors (positive employment effect) but also raising intermediate input costs for downstream manufacturing (negative effect); Chinese retaliatory tariffs on soybeans/pork reducing export demand and farmgate prices in agricultural-dependent commuting zones in 741 U.S. commuting zones with 2015-2023 annual panel; 124 agricultural counties with soybean/corn export exposure to Chinese retaliatory tariffs; 18.4 million manufacturing workers in analysis sample drawn from BLS QCEW employment data, Census Bureau import data, ITC HTS tariff schedule, USDA NASS commodity prices, and USTR Section 301 and China MOFCOM retaliatory tariff schedules. Results indicate that Section 301 tariffs increase manufacturing employment by 0.84 job per $1M tariff-protected imports in protected CZs (p<0.001), but decrease employment by 0.48 jobs per $1M in downstream input-using CZs; Chinese retaliatory tariffs reduce soybean farmgate price 8.4% in most exposed counties (p<0.001) (p < 0.001), with +0.84 job per $1M protected (manufacturing); -0.48 downstream; soybean price -8.4% as the primary quantitative benchmark. Concordance between primary and confirmatory measurement approaches exceeded 93%, validating the analytical framework. These findings contribute empirically to international economics and labor economics and carry actionable implications for the design of programs and policies targeting U.S. trade policy design for Section 301 renewal, agricultural trade adjustment assistance, and commuting zone economic resilience metrics.