Trade Volume and Compositional Shifts in the Vietnam-USA Telecommunications Corridor: Volume Null, Density Anomaly (2023-2025)

Pagarani, Vicky (2026): Trade Volume and Compositional Shifts in the Vietnam-USA Telecommunications Corridor: Volume Null, Density Anomaly (2023-2025).

Abstract

The analysis carried out in this research paper attempts to understand the trade dynamics in the Vietnam-USA telecommunications corridor from 2023 to 2025 under the recent tariff regime. The macroeconomic backdrop is characterized primarily by the historic decoupling, with the share of US imports from China fell to 9% by July 2025 (Alfaro and Chor 2025). In a Two-Way Fixed Effects DiD design (N=4,464; T=36; G=124), we find a rather unusual nominal routing hardware (HS 851762) surge of 978.03M dollars. Further, the application of Rambachan & Roth (2023) Honest Bounds resulted in this aggregate dollar figure being statistically subsumed by compounding pre-trend volatility. Cutting off this financial noise, a strong statistically significant underlying signal becomes visible: a negative density anomaly (Honest Bounds [-2151, -607] Kg/M-USD). The effect of this is that post-policy imports are structurally lightened in relation to their reported financial worth. The SCM asserts that semiconductor fabrication (HS 8542) is not responsive (gap=-$14.23M, Abadie p=0.67). To conclude, the reaction is primarily not volume dumping but a compositional change, hardware substitution and a complicated supply-chain reallocation in response to the new rules of origin. For the identification of the exact firm-level mechanisms, future micro-data research is needed.

• Item Type: MPRA Paper
• Language: English
• Keywords: Vietnam-USA telecommunications corridor; Trade decoupling; Difference-in-Differences (DiD); Synthetic Control Method (SCM); Rambachan & Roth Honest Bounds; HS 851762; Negative density anomaly; Compositional trade shifts; Hardware substitution; Rules of origin; China Plus One; Transshipment penalty; HS 8542; SHA-256 FE83194CE17084A872E6CB7DC176D562A8E0BFD7CE70D37DC43C6412D3ADFDF7
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade

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