 Illuminating the effects of the US-China tariff war on China’s economyDavin Chor and Bingjing Li Journal of International Economics, 2024, vol. 150, issue C Abstract: This paper studies the impact of the US-China tariff war on China, using high-frequency night lights data and grid-level measures of tariff exposure. Exploiting within-grid variation over time and controlling extensively for grid-specific contemporaneous trends, we find that each one-percentage-point increase in exposure to the US tariffs was associated with a 0.59% reduction in night-time luminosity. This impact was highly skewed across locations: Grids with negligible direct exposure to the US tariffs accounted for 70% of China’s population. But the tail 2.5% of China’s population with the highest exposure saw an implied 2.52% (1.62%) decrease in income per capita (employment) relative to unaffected grids. These effects were moreover concentrated in locations with a high commuting openness. By contrast, we do not find significant effects from China’s retaliatory tariffs, and offer evidence of several channels through which the impact on imported inputs was mitigated. In a parallel analysis at the prefecture level, we confirm that the US tariffs had discernible negative aggregate consequences. Keywords: US-china tariff war; Night lights (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:150:y:2024:i:c:s0022199624000503 DOI: 10.1016/j.jinteco.2024.103926 Access Statistics for this article Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and RodrÃguez-Clare, Andrés More articles in Journal of International Economics from Elsevier |
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