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Discussion Paper
The Anatomy of Export Controls
Governments increasingly use export controls to limit the spread of domestic cutting-edge technologies to other countries. The sectors that are currently involved in this geopolitical race include semiconductors, telecommunications, and artificial intelligence. Despite their growing adoption, little is known about the effect of export controls on supply chains and the productive sector at large. Do export controls induce a selective decoupling of the targeted goods and sectors? How do global customer-supplier relations react to export controls? What are their effects on the productive sector? ...
Report
Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls
Hegemonic countries safeguard their dominant position by maintaining technological leadership. To this end, the U.S. has imposed export controls to restrict China’s access to strategic, cutting-edge technologies. We document that these measures lead to an immediate, broad-based decoupling of supply chains, with U.S. suppliers more likely to end relations with Chinese customers—even those not directly targeted by the policy. However, we find no evidence of reshoring or friend-shoring in U.S. supply chains. Due to these disruptions, affected U.S. suppliers experience a $130 billion decline ...