Tariff pass-through: the case of china's WTO accession

Dai Mi

No 870, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Recent studies on the China–US trade war reveal complete tariff pass-through into import prices for both China and the US. This study 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 during the World Trade Organization (WTO) accession period from 2000 to 2006. Consistent with evidenc e during the trade war, tariff pass-through is also complete for tariff reductions induced by WTO accessio n. Structural estimates of supply elasticity also imply complete tariff pass-through. These results are rob ust across ownership types and product end-use. Surprisingly, no correlation exists between tariff pass-thr ough and China’s market share in global imports. Even for products where China accounts for more th an 30% of global imports, we still find a complete pass-through of tariffs into import prices.

Keywords: Tariff; Pass-through; WTO accession (search for similar items in EconPapers)
JEL-codes: F13 F14 (search for similar items in EconPapers)
Date: 2022-10
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 870. 2022-10

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