Trade war and peace: U.S.-China trade and tariff risk from 2015–2050

George Alessandria, Shafaat Yar Khan, Armen Khederlarian, Kim J. Ruhl and Joseph B. Steinberg

Journal of International Economics, 2025, vol. 155, issue C

Abstract: We model trade policy as a Markov process. Using a dynamic exporting model, we estimate how expectations about U.S. tariffs on China have changed around the U.S.-China trade war. We find (i) no increase in the likelihood of a trade war before 2018; (ii) the trade war was initially expected to end quickly but its expected duration grew substantially after 2020; and (iii) the trade war reduced the likelihood that China would face Non-Normal Trade Relations tariffs in the future. Our findings imply the expected mean future U.S. tariff on China rose more under President Biden than under President Trump.

Keywords: Trade war; Trade liberalization; Trade-policy uncertainty (TPU); Trade dynamics; Trade elasticity (search for similar items in EconPapers)
JEL-codes: F12 F13 F14 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:155:y:2025:i:c:s0022199625000224

DOI: 10.1016/j.jinteco.2025.104066

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