Trade War and Peace: U.S.-China Trade and Tariff Risk from 2015–2050

George Alessandria, Shafaat Khan, Armen Khederlarian, Kim Ruhl and Joseph Steinberg

No 32150, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We model trade policy as a Markov process. Using a dynamic exporting model, we estimate how expectations about U.S. tariffs on China have changed around the U.S.-China trade war. We find (i) no increase in the likelihood of a trade war before 2018; (ii) the trade war was initially expected to end quickly but its expected duration grew substantially after 2020; and (iii) the trade war reduced the likelihood that China would face Non-Normal Trade Relations tariffs in the future. Our findings imply the expected mean future U.S. tariff on China rose more under President Biden than under President Trump.

JEL-codes: F12 F13 F14 (search for similar items in EconPapers)
Date: 2024-02
New Economics Papers: this item is included in nep-cna and nep-int
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