Authors: Matteo Crosignani, Lina Han, Marco Macchiavelli, and André F. Silva
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Staff Reports
Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls
Number 1096
April 2024 Revised November 2024
April 2024 Revised November 2024
JEL classification: G12, F51, F38
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 in market capitalization, along with reductions in profitability and employment.
Author Disclosure Statement(s)
Matteo Crosignani
I, Matteo Crosignani, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Lina Han
I, Lina Han, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Marco Macchiavelli
The author declares that he has no relevant or material financial interests that relate to the research described in this blog post.
Andre F. Silva
I, Andre F. Silva, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
I, Matteo Crosignani, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Lina Han
I, Lina Han, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Marco Macchiavelli
The author declares that he has no relevant or material financial interests that relate to the research described in this blog post.
Andre F. Silva
I, Andre F. Silva, author of the NY FED Staff Report submission “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls” declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.htm.
Suggested Citation:
Crosignani, Matteo, Lina Han, Marco Macchiavelli, and André F. Silva. 2024. “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls.” Federal Reserve Bank of New York Staff Reports, no. 1096, April. https://doi.org/10.59576/sr.1096
Crosignani, Matteo, Lina Han, Marco Macchiavelli, and André F. Silva. 2024. “Geopolitical Risk and Decoupling: Evidence from U.S. Export Controls.” Federal Reserve Bank of New York Staff Reports, no. 1096, April. https://doi.org/10.59576/sr.1096
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