Bloomberg.com:
What Trump?s trade guru doesn?t get about economics
3 March 2018
Using tariffs to restore American competitiveness could easily backfire. If U.S. companies can hunker behind trade barriers and sell to a captive market, many will lose their edge. Research by economists Nicholas Bloom, Mirko Draca, and John Van Reenen has shown that while exposure to Chinese competition did destroy U.S. jobs, it also made U.S. businesses more productive, in part by forcing them to innovate faster. A 2007 study by Alla Lileeva and Daniel Trefler found that increased exposure to U.S. competition raised productivity at Canadian manufacturing plants. In fact, across a variety of countries, trade barriers seem to hold back productivity.
Related publications
‘Trade Induced Technical Change? The Impact of Chinese Imports on Innovation’, IT and Productivity, Nicholas Bloom, Mirko Draca and John Van Reenen, Review of Economic Studies, 83:1, January 2016