Trade Effects of U.S. China Trade War: An Econometric Analysis
8 Pages Posted: 18 Jun 2020
Date Written: May 23, 2020
In this paper, as a unique attempt so far in the literature, we study empirically the effect of tariffs imposed by US and China on exports of China and US respectively, so far. We use a CARD trade war tariffs dataset, UNCTAD TRAINS dataset for tariffs data before trade war along with trade data from US Census. Using fixed effect panel data model, we find that there is significant negative impact of tariffs imposed on the export values of both the countries. We also find that, Effect of tariff imposed by China on US export values is more than effects of tariff imposed by US on China’s export values. On an average, for one percent point rise in tariff rate, US exports to China may fall by 1.6 times more than Chinese exports to USA.
Keywords: US China Trade war, US Exports, China Exports, International Tariffs, USTDA, CARD, UNCTAD TRAINS, Panel Data Models
JEL Classification: O24, F13, F14, C23
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