Destruction and Deflection: Evidence from American Antidumping Actions against China

Abstract

With a decrease in tariffs around the world, antidumping duties, as an important part of temporary trade barriers, have increased dramatically to take their place. China and the United States (US) are the two heaviest targets and users of antidumping investigations respectively. In this paper, using Chinese annual transaction-level export data from 2000 to 2017, we study the trade destruction effect and the trade deflection effect of all antidumping investigations initiated by the US against China. We find strong evidence of both destruction and deflection effects. American antidumping actions reduce China's exports to the US, while increasing exports to non-US countries. Critically, the trade destruction and deflection effects are long-lived, and industry indicators (including industry employment, industry concentration and capital intensity) play significant roles in deflecting trade. In general, the impact of antidumping actions could be greater than what the direct effect alone might suggest.