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The impact of US tariffs against China on US imports: Evidence for trade diversion?

Philipp Meinen, Patrick Schulte (), Simone Cigna and Nils Steinhoff

No 46/2019, Discussion Papers from Deutsche Bundesbank

Abstract: In this paper we provide evidence on the existence of short-run trade diversion effects as a consequence of tariff shocks. We exploit sudden policy changes in the context of the trade dispute between the US and China. Based on a data set covering monthly product-level information on US imports from 30 countries for the period January 2016 until May 2019, we employ a difference-in-differences estimation framework. Doing so, we (1) can confirm previous findings showing a strong negative direct effect of US tariffs on US imports from China, but (2) do not find evidence for significant short-run trade diversion effects towards third countries. This latter finding holds for product and country subgroups as well as for a variety of robustness checks.

Keywords: tariffs; US imports; trade diversion; product-level data; difference-in-differences (search for similar items in EconPapers)
JEL-codes: F13 F14 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdps:462019

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