Tariff pass‐through: The case of china's WTO accession

Mi Dai

The Developing Economies, 2023, vol. 61, issue 4, 278-296

Abstract: Recent studies on the China–US trade war surprisingly find complete tariff pass‐through into import prices for both China and the United States. This paper provides additional evidence of tariff pass‐through in China. Using firm‐level monthly trade transaction data, we estimate the tariff pass‐through for Chinese imports in the period of WTO accession during 2000–2006. Consistent with evidence during the trade war, tariff pass‐through is also complete for tariff reductions induced by the WTO accession. Structural estimates of export supply elasticity also imply complete tariff pass‐through. Additionally, we find the complete pass‐through result holds regardless of firm ownership types, product end‐use, or China's market share in world imports.

Date: 2023
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