Did Tariff Exposure Bend National Emission Trajectories? A Pre-Trends Cautionary Tale from the US–China Trade War

Mazen Diwani, Mohamed Hamid and Giacomo Santangelo
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Mazen Diwani: MS Research Hub
Mohamed Hamid: University of People
Giacomo Santangelo: University of Fordham

MSR Working Papers from M&S Research Hub institute

Abstract: The 2018 US–China trade war represented the largest escalation of trade barriers among major economies in recent decades, yet its environmental consequences remain poorly understood. This study examines whether tariff exposure altered national CO₂ emission trajectories across 171 countries between 2015 and 2019 using propensity score matching based on trade-weighted tariff exposure. While conventional matched comparisons suggest that highly exposed countries experienced significantly faster emissions growth than less exposed economies, this apparent effect disappears when the appropriate weighted Average Treatment Effect on the Treated (ATT) estimator is applied. Placebo tests further reveal that treated countries were already on higher emission-growth paths before tariffs were introduced, indicating that the observed differences reflect pre-existing industrialization trends rather than the causal impact of the trade war. The findings show no statistically significant effect of tariff exposure on national CO₂ emission trajectories beyond underlying growth dynamics. More broadly, the study demonstrates that relying solely on baseline covariate balance can produce misleading policy conclusions and highlights the importance of placebo tests, pre-treatment trend diagnostics, and correct matching estimators in observational policy evaluation.

Keywords: energy; carbon emissions; trade (search for similar items in EconPapers)
JEL-codes: F18 O13 (search for similar items in EconPapers)
Pages: 32
Date: 2026-07
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Persistent link: https://EconPapers.repec.org/RePEc:ris:msrwps:023241

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