Does Participation in China-U.S. Trade Impede Carbon Emission Reduction Efforts Across Countries?

Abstract

Climate change remains a critical global challenge, highlighting the need to address the environmental consequences of international trade. This study examines the underexplored impact of participation in China-U.S. trade on the carbon emission intensities of 189 countries (2000-2021). Using the EORA26 database and a global value chain framework, we analyze multi-regional input-output data across 26 sectors to explore the trade-carbon nexus. The findings show that countries involved in China-U.S. trade often experience higher carbon intensities than their global trade averages, though this disparity narrows over time. Regional trends reveal stark differences: European and North American countries show consistent environmental improvements, while Asia, South America, and Africa exhibit diverse trajectories shaped by economic and industrial structures. Sectoral analysis identifies electricity, gas, and water as persistently high-emission industries, while sectors such as electrical and machinery demonstrate environmental gains. Additionally, trade flow direction significantly influences carbon impacts, underscoring the asymmetry in emissions between re-exports to the U.S. via China and vice versa. These insights deepen understanding of trade's role in carbon dynamics, guiding policymakers to develop region- and sector-specific strategies. Such approaches reduce emissions while fostering sustainable economic growth across regions and industries, bridging the gap between economic and climate goals.

Keywords: China-U.S. Trade, Carbon Emission Intensity, Global Value Chain, Trade Flow Analysis, Environmental Sustainability