The Remains of the Trade: The U.S.-China Trade War and its Aftermath

Pol Antrà s, Adrian Kulesza and Andrea Presbitero

No 21948, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study how the U.S.-China trade war has reshaped global trade patterns, creating significant spillovers to third countries. Using recent tariff policy changes and monthly international trade flow data, we document a redirection of Chinese exports away from the U.S. market and toward third countries. To interpret the impact of these reallocations on third countries, we introduce a taxonomy that separates four exposure margins - export competition, import competition, consumer gains, and sourcing gains - and construct theoretically-derived indices that map countries into these channels. Recent work often proxies such exposure with trade-basket similarity. We show why this can be problematic: similarity measures are symmetric and omit the size of product-specific shocks, Chinese market penetration, substitution elasticities, and incidence weights. Our model-based indices therefore generate country rankings that differ substantially from conventional similarity measures.

Keywords: Trade; China shock; Tariffs; Competition (search for similar items in EconPapers)
JEL-codes: F1 F2 F4 F6 (search for similar items in EconPapers)
Date: 2026-09
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