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The Incidence of the U.S.-China Solar Trade War

Sébastien Houde () and Wenjun Wang ()
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Sébastien Houde: Grenoble Ecole de Management, 38000 Grenoble, France. Research affiliate at CEPE, ETH Zurich and Research Fellow at E4S
Wenjun Wang: Agricultural Bank of China

No 22/372, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: This paper investigates the distributional welfare effects of the recent trade war in the solar manufacturing sector resulting from the U.S. government-initiated trade tariffs against Chinese solar manufacturers. Our structural econometric model incorporates the vertical structure between upstream solar manufacturers and downstream solar installers. Counter-factual simulations show the tariffs had a small positive impact on U.S. manufacturers but a large negative impact on U.S. consumers and installers. Chinese manufacturers were also negatively economically affected. Overall, our results suggest the solar trade war led to large welfare losses in both countries and substantially slowed the adoption of solar photovoltaic technology.

Keywords: Trade War; Solar Industry; Structural Econometric Model; Pass-Through (search for similar items in EconPapers)
JEL-codes: F14 L10 Q50 (search for similar items in EconPapers)
Pages: 68 pages
Date: 2022-04
New Economics Papers: this item is included in nep-cna, nep-ene and nep-int
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