EXECUTIVE SUMMARY

This paper introduces a new supply chain measure called revealed comparative dependence (RCD), based on publicly available national and global trade data. The paper shows how high RCD can be used to identify product classes where the United States is excessively dependent on Chinese imports.

The paper suggests that RCD can be used to inform the Biden Administration’s industrial policy. The Department of Commerce can use RCD to publish a list of high-vulnerability goods. Policymakers can pay special attention to goods on the list to reduce dependence on China, while considering rolling back tariffs on goods not on the list.

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