Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300475 
Year of Publication: 
2024
Series/Report no.: 
Staff Report No. 1096
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
Amid the current U.S.-China technological race, the U.S. has imposed export controls to deny China access to strategic technologies. We document that these measures prompted a broad-based decoupling of U.S. and Chinese supply chains. Once their Chinese customers are subject to export controls, U.S. suppliers are more likely to terminate relations with Chinese customers, including those not targeted by export controls. However, we find no evidence of reshoring or friend-shoring. As a result of these disruptions, affected suppliers have negative abnormal stock returns, wiping out $130 billion in market capitalization, and experience a drop in bank lending, profitability, and employment.
Subjects: 
geopolitical risk
export controls
decoupling
supply chains
JEL: 
G12
F51
F38
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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