Decoupling or Resilience? Technological GVCs in the Face of Trump's Policies

The paper explores the concept of the "Trump effect," defined by a technological disconnection and evaluated through alterations in export specialization among various economies. It scrutinizes if there were any shifts in the specialization trends of the EU, China, and the US in terms of domestic value-added exports in technology sectors after 2017. The research covers the period from 1995 to 2020 and utilizes a fluctuating difference-in-differences approach. The findings suggest that technological global value chains (GVCs) were minimally affected by Trump's policies, showing scant evidence of significant decoupling. Among the few economies that felt the impact of decoupling more strongly, the US turned out to be one of them. Consequently, the research underscores the resilience of GVCs against the measures taken by the Trump administration and in some cases adaptability of GVCs to the new conditions. The findings contribute to ongoing theoretical debates by challenging the prevalent 'deglobalization' narrative, demonstrating that technological GVCs have adapted rather than collapsed in response to geopolitical disruptions.