Skip to Main Navigation

The US-China Trade War and Global Reallocations (English)

This paper studies global trade responses to the US-China trade war. It estimates the tariff impacts on product-level exports to the US, China, and rest of world. On average, countries decreased exports to China and increased exports to the US and rest of world. Most countries export products that complement the US and substitute China, and a subset operate along downward-sloping supplies. Heterogeneity in responses, rather than specialization, drives export variation across countries. Surprisingly, global trade increased in the products targeted by tariffs. Thus, despite ending the trend towards tariff reductions, the trade war did not halt global trade growth.

Details

  • Author

    Fajgelbaum,Pablo David, Goldberg,Pinelopi Koujianou, Kennedy,Patrick, Khandelwal,Amit Kumar, Taglioni,Daria

  • Document Date

    2022/01/06

  • Document Type

    Policy Research Working Paper

  • Report Number

    WPS9894

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    United States,

    China,

  • Region

    Rest Of The World, East Asia and Pacific,

  • Disclosure Date

    2022/01/06

  • Disclosure Status

    Disclosed

  • Doc Name

    The US-China Trade War and Global Reallocations

  • Keywords

    development research group; trade war; positive demand shock; negative demand shock; tariff change; growth in trade; bilateral trade data; federal reserve board; effect of tariff; oil exporting countries; division of labor; pattern of trade; elasticity of substitution; normal trade relations; scale of production; scale production; improved market access; supply curve; export growth; tariff increase; global trade; product level; increased export; standard error; global export; supply chain; foreign tariff; import tariff; tariff rate; export share; price change; product tax; trade partner; supply elasticity; empirical analysis; tariff cut; increasing return; trade datum; demand system; tariff impact; tariff uncertainty; trade opportunity; export product; trend line; weighted average; aggregate exports; bilateral tariff; expenditure share; empirical investigation; tariff-inclusive price; summary statistic; raw data; log change; month period; increased trade; tariff reduction; trade model; standard deviation; tariff data; product variety; International Trade; factor price; aggregate demand; affected country; goods market; log exports; positive correlation; robustness check; input price; competitive pricing; domestic price; trade costs; increase tariff; trade friction; new plant; high tariff; export platform; washing machine; demand elasticity; differential outcomes; demand shift; exporting country; monopolistic competition; External Economies; recent research; domestic demand; substantial variation; imposing tariffs; foreign market; empirical research; scale economy; home production; export tax; domestic production; comparative advantage; missing value; reduce trade; export price; rising cost; imported inputs; customs datum; remove trade; import share; previous paragraph; lower demand; gravity model; foreign demand; product category; point estimate; research assistance; international market; export value; Research Support; aggregate response; world exports; export supply; development policy; open access; trade growth; cross-country variation; systematic evaluation; reducing import; supply shock; elastic supply; trade shock; empirical result; constant elasticity of substitution; supply side

Downloads

COMPLETE REPORT

Official version of document (may contain signatures, etc)

  • Official PDF
  • TXT*
  • Total Downloads** :
  • Download Stats
  • *The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.

Citation

Fajgelbaum,Pablo David Goldberg,Pinelopi Koujianou Kennedy,Patrick Khandelwal,Amit Kumar Taglioni,Daria

The US-China Trade War and Global Reallocations (English). Policy Research working paper,no. WPS 9894 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/735611641482672239/The-US-China-Trade-War-and-Global-Reallocations