Adjusting to Trade Policy: Evidence from U.S. Antidumping Duties on Vietnamese Catfish

Abstract

In 2003, after claims of dumping, the U.S. imposed heavy tariffs on imports of catfish from Vietnam. As a result, Vietnamese exports of catfish to the U.S. market sharply declined. Using a panel data of Vietnamese households, we explore the responses of catfish producers in the Mekong delta between 2002 and 2004. We study adjustments not only in catfish aquaculture but also in other economic activities. We find that, over this period, the rate of income growth was significantly lower among households relatively more involved in catfish farming in 2002. The source of this slower growth is explained by a relative decline in both catfish income and revenues from other miscellaneous farms activities such as poultry and livestock farming. Households did not adjust labor supply, most likely because of off-farm employment limitations. We also document that households more exposed to the shock reduced the share of investment assigned to catfish, while substituting into agriculture.