Abstract:

This study provides a comprehensive analysis of decoupling through the lens of technonationalism, focusing on the "Trump effect"—the influence of Trump administration policies on trade specialization within global value chains (GVCs), with particular emphasis on the US-China trade relationship. Examining shifts in export specialization and domestic value added across 30 economies (28 European countries, the US, and China) over the period 1995–2020, this research focuses on technological sectors that are most susceptible to policy-driven fragmentation. Employing a time-varying difference-in-differences methodology, the study identifies structural shifts following 2017, evaluating the extent to which these changes reflect US policy impacts on GVC stability. The findings reveal limited disruptions within technological GVCs attributable to Trump-era policies, highlighting the resilience of these networks against geopolitical pressures. Thus, the study contributes to a nuanced understanding of GVC durability amid targeted decoupling efforts.