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The U.S.–China trade war: Tariff data and general equilibrium analysis

Minghao Li, Edward Balistreri () and Wendong Zhang ()

Journal of Asian Economics, 2020, vol. 69, issue C

Abstract: The current trade war between the United States and China is unprecedented in modern history. This study introduces a database of tariff increases resulting from the trade war and quantifies the impacts using the canonical GTAPinGAMS model calibrated to the recently released GTAP version 10 accounts. We find that the remaining tariff increases as of March 2020 after the phase one trade deal decrease welfare in China by 1.7% and welfare in the United States by 0.2%. Impacts on sectoral revenue are reported for both countries. China's exports to and imports from the United States are reduced by 52.3% and 49.3%. The trade flow between the United States and China will be diverted to their major trade partners resulting in higher welfare in those countries, including many Asian countries. The estimated impacts are robust to using alternative trade elasticities and are amplified in the absence of the phase one tariff reductions.

Keywords: Trade war; Tariff; Computational general equilibrium (CGE); Welfare analysis (search for similar items in EconPapers)
JEL-codes: F11 F12 F17 (search for similar items in EconPapers)
Date: 2020
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Working Paper: The U.S.-China trade war: Tariff data and general equilibrium analysis (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:69:y:2020:i:c:s1049007820300968

DOI: 10.1016/j.asieco.2020.101216

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