THE US–CHINA TRADE DISPUTE: A MACROPERSPECTIVE

Rod Tyers and Yixiao Zhou
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Rod Tyers: Business School, University of Western Australia, Research School of Economics, Centre for Applied Macroeconomic Analysis (CAMA), Australian National University, Australia
Yixiao Zhou: Crawford School of Public Policy, Australian National University, Australia

The Singapore Economic Review (SER), 2024, vol. 69, issue 07, 2055-2082

Abstract: Declining global multilateralism has brought numerous trade disputes, most notably between the US and China. Here, a new global model featuring monetary policy and revenue reassignment are used to examine the effects of this conflict and this macroeconomic perspective proves to be important. The emergent results provide additional insight and complement other “trade-focused†general equilibrium studies. We find that, with capacity adjustment, US unilateral protection emerges as “beggar thy neighbor†policy. China’s proportional losses are large, little mitigated by its retaliation, which nonetheless constrains US net gains. Third regions trading with China and the US suffer losses only partly offset by trade diversion and greatly enhanced if, to avoid leakage, protection is extended to all sources.

Keywords: Trade policy; macroeconomic policy; general equilibrium analysis; numerical theory; China (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S0217590821500041

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