Trade diversion and labor market adjustment: Vietnam and the U.S.-China trade war

Karin Mayr-Dorn, Gaia Narciso, Anh Dang and Hien Phan

No 2023-04, Economics working papers from Department of Economics, Johannes Kepler University Linz, Austria

Abstract: This paper investigates the effects of the U.S.-China trade war on trade diversion and the labor market in a third country, Vietnam. We exploit variation in Vietnamese exports to the U.S. across industries and districts based on the extent of the U.S. tariff hikes on Chinese imports and provide evidence of a positive effect on labor market outcomes in Vietnam. Vietnamese workers and districts that are more exposed to the trade war display higher employment, working hours, and wages as a result. Our findings reveal that bilateral trade policy can have substantial offsetting effects on trade flows and labor markets in third countries.

Keywords: trade diversion; trade war (search for similar items in EconPapers)
JEL-codes: F14 F16 R23 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-des, nep-int, nep-lab and nep-sea
Note: English
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Trade diversion and labor market adjustment: Vietnam and the U.S.-China trade war (2023)
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