Graduation Year

2026

Date of Submission

4-2026

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Florian Madison

Abstract

The 2018 Trade war between the U.S. and China had numerous effects on the U.S. economy. This paper examines one of those effects: the effect of the Section 232 steel and aluminum tariffs on employment in U.S. man- ufacturing industries. Examined through the input cost channel effect, this paper attempts to determine the employment outcome for industries reliant on input goods tariffed by Section 232 in the short-run period of 2018-2019. A shift-share design and event study is utilized at industry-quarter level. Standard Economic theory states that tariffs on an input good such as steel should harm manufacturers. The results established seem counterintuitive at first glance as the import protection channel effect (through Section 301 tariffs on China) dominated the input cost channel (Section 232) in the short- run period examined. Providing insight not often discussed in classical trade economics literature: industries exposed to Section 232 experienced a relative gain in employment when compared to less exposed industries.

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