How did Chinese exporters manage the trade war?

Liugang Sheng, Huasheng Song and Xueqian Zheng

Journal of International Money and Finance, 2025, vol. 153, issue C

Abstract: This paper studies how Chinese exporters managed the recent US tariff hikes. Contrary to the conventional wisdom of horizontal trade diversion, China did not divert more of its products to other Northern countries but more to the South. Moving down the quality ladder of destinations helps Chinese exporters escape competition for high-quality products in the North and lowers penetration costs in the South. This vertical trade diversion reduces quality-adjusted export prices but raises qualities and gross prices of Chinese diverted exports, particularly in poor countries and for products with high quality scopes, implying that it may benefit the South more.

Keywords: Trade war; Trade protectionism; Trade diversion; Quality ladders (search for similar items in EconPapers)
JEL-codes: F1 F51 O24 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S026156062500035X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:153:y:2025:i:c:s026156062500035x

DOI: 10.1016/j.jimonfin.2025.103300

Access Statistics for this article

Journal of International Money and Finance is currently edited by J. R. Lothian

More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().