  I use the unanticipated and large additional tariffs the US imposed on
European Union products due to the Airbus-Boeing conflict to analyze how
exporters reacted to a change in trade policy. Using firm-level data for Spain
and applying a difference-in-differences methodology, I show that the export
revenue in the US of the firms affected by the tariff hike did not
significantly decrease relative to the one of other Spanish exporters to the
US. I show that Spanish exporters were able to neutralize the increase in
tariffs by substituting Spanish products with products originated in countries
unaffected by tariffs and shifting to varieties not affected by tariffs. My
results show that tariff avoidance is another margin exporters can use to
counteract the effects of a tariff hike.

General Economics;Economics