Anti‐Dumping Duty Circumvention Through Trade Rerouting: Evidence from Chinese Exporters

40 Pages Posted: 16 Apr 2019

See all articles by Xuepeng Liu

Xuepeng Liu

Kennesaw State University - Department of Economics and Finance

Huimin Shi

Renmin University of China - School of Economics

Date Written: May 2019

Abstract

We study the evasion of US anti‐dumping duties by some Chinese exporters through trade rerouting via third countries or regions. Using detailed monthly trade data reported by China and the US Customs during the period of 2002–06, we find that US anti‐dumping actions against China lead to a stronger positive correlation between US imports from third countries and Chinese exports to the same third countries. Such a positive correlation is more pronounced for the products subject to anti‐dumping duties (treatment groups) than similar products not subject to these duties (control groups). The evidence is stronger for less‐differentiated products whose certificates of origins are easier to be modified and is stronger for third countries where the rerouting cost is low. These findings are consistent with a trade rerouting story, rather than a simple story of trade diversion (i.e., increase in some third countries' imports from China) and trade deflection (i.e., increase in some third‐country exports to the US). We also rule out other alternative stories, consider prior production in third countries and concurrent anti‐dumping actions against China or third countries, pay a particular attention to the many zero trade flows in the monthly level data and check the robustness to using an alternative control group and quarterly data, etc.

Keywords: anti‐dumping, circumvention, US‐China trade

Suggested Citation

Liu, Xuepeng and Shi, Huimin, Anti‐Dumping Duty Circumvention Through Trade Rerouting: Evidence from Chinese Exporters (May 2019). The World Economy, Vol. 42, Issue 5, pp. 1427-1466, 2019, Available at SSRN: https://ssrn.com/abstract=3372528 or http://dx.doi.org/10.1111/twec.12747

Xuepeng Liu (Contact Author)

Kennesaw State University - Department of Economics and Finance ( email )

United States

HOME PAGE: http://ksuweb.kennesaw.edu/~xliu6/

Huimin Shi

Renmin University of China - School of Economics ( email )

No. 59, Zhongguancun Street
Beijing, Beijing 100080
China

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