Anti-Dumping Duty Circumvention through Trade Re-Routing: Evidence from Chinese Exporters

Abstract

We study the evasion of U.S. anti-dumping duties by Chinese exporters through trade rerouting via third countries or regions. Using detailed monthly trade data reported by China and the U.S. Customs during the period of 2002–2006, we find that U.S. anti-dumping actions against China lead to a stronger positive correlation between U.S. imports from third countries and Chinese exports to the same third countries. Such an effect is more pronounced for the products subject to anti-dumping duties (treatment groups) than similar products not subject to these duties (control groups), which is consistent with trade re-routing. We show further that the positive correlation increases with some product or third-country characteristics that are conducive to duty evasion.