The Effects of US Additional Tariffs in Trump 2.0 on Production and Trade: Evidence From Thailand

How much has the US-China tariff war impacted economic outcomes in China? We address this question using high-frequency night lights data, together with measures of the trade exposure of fine grid locations constructed from Chinese firms' geo-coordinates. Exploiting within-grid variation over time and controlling extensively for grid-specific contemporaneous trends, we find that each 1 percentage point increase in exposure to the US tariffs was associated with a 0.59% reduction in night-time luminosity. We combine these with structural elasticities that relate night lights to economic outcomes, motivated by the statistical framework of Henderson et al. (2012). The negative impact of the tariff war was highly skewed across locations: While grids with negligible direct exposure to the US tariffs accounted for up to 70% of China's population, we infer that the 2.5% of the population in grids with the largest US tariff shocks saw a 2.52% (1.62%) decrease in income per capita (manufacturing employment) relative to unaffected grids. By contrast, we do not find significant effects from China's retaliatory tariffs.

Recently announced and enacted US tariffs reduce partners’ access to the US market and lead to trade diversion. Impacted countries may respond in (at least) three ways: imposing retaliatory tariffs on the US, resorting to industrial policy to support their producers, and/or signing trade agreements to find new market access opportunities. Relying on a quantitative trade model, we study the trade and welfare implications of these policy responses. Retaliation hurts US exports, can improve the terms of trade, but also creates distortions. Subsidies can expand exports, making up for lost markets in the US, but they are costly, increase distortions especially for the subsidizers, and worsen trade diversion effects that could eventually lead to new tariffs targeting subsidizers. Seeking deeper integration with other partners can help countries expand trade while reducing distortions. Even in presence of US tariffs, real income for the liberalizing countries and the world is higher when partners choose to deepen integration as part of their policy strategy.

This paper provides concordance procedures for product-level trade and production data in the EU and examines the implications of changing product classifications on measured product adding and dropping at Belgian firms. Using the algorithms developed by Pierce and Schott (2012a, 2012b), the paper develops concordance procedures that allow researchers to trace changes in coding systems over time and to translate product-level production and trade data into a common classification that is consistent both within a single year and over time. Separate procedures are created for the eight-digit Combined Nomenclature system used to classify international trade activities at the product level within the European Union as well as for the eight-digit Prodcom categories used to classify products in European domestic production data. The paper further highlights important differences in coverage between the Prodcom and Combined Nomenclature classifications which need to be taken into account when generating combined domestic production and international trade data at the product level. The use of consistent product codes over time results in less product adding and dropping at continuing firms in the Belgian export and production data.

The imposition of unilateral tariffs by the United States on various imported products, including those from Indonesia, has significant implications for international trade performance. This protectionist policy reflects the global trend toward neo-protectionism, which is often associated with increasing domestic political pressure and global economic uncertainty. This study aims to analyze the impact of unilateral US tariffs on Indonesian exports by examining changes in export volume, commodity prices, and competitive position in the US market. The methodology used includes quantitative descriptive analysis based on data from the Central Statistics Agency (BPS), the Indonesian Ministry of Trade, and the World Trade Organization (WTO), as well as strengthening international trade theory such as the gravity model and comparative advantage theory. The analysis shows that the imposition of US tariffs has led to a decline in exports in certain sectors, particularly manufacturing-based products and low-value-added commodities, while simultaneously encouraging export market diversification and strategies to strengthen the added value of domestic products. These findings emphasize the importance of adaptive trade policies through economic diplomacy, expanding non-traditional market access, and utilizing free trade agreements (FTAs) as a mitigation strategy. The implications of this research contribute to the formulation of a more resilient Indonesian foreign trade policy against global protectionist shocks.

Abstract. The inception of World Trade Organization (WTO) in 1995 was expected to reduce trade barriers across member countries on one hand and facilitate growth though promotion of international trade in merchandise products and services on the other. The subsequent WTO-led reforms deepened the globalization wave. In recent times however, the world is witnessing a phase of ‘de-globalization’, with rise in trade barriers and inwardness. The recent increase in US tariffs on Chinese exports and countermeasures imposed by China are a case in point. In 2014 India has initiated the Make-in-India scheme for deepening industrialization and facilitating exports. The current paper evaluates the possible opportunities for expanding Indian pharmaceutical exports in the US market, given the increase in tariff against Chinese products with the help of select trade indices. The analysis portrays a modest opportunity for Indian pharmaceutical exports in the US market, based on their past performance. Only six products at HS 6-digit level, based on the six indicators, are found to be enjoying competitiveness in the US market. The paper concludes that facilitating R&D in pharma segment as well as expanding the coverage of mutual recognition of standards in US may be explored as possible steps for enhancing Indian exports. Keywords. India, US, Pharmaceutical trade, Trade indices, Trade policy, Make in India. JEL. F10, F13.

Despite the “Phase One Deal” agreed on mid-December 2019, bilateral tariffs between US and China remain at unprecedented high levels, which will have long-lasting effects. US tariffs remain very high on parts, components and other intermediate products; similarly, only the last wave of Chinese retaliatory tariffs has been half cut. We investigate in this paper how such tensions between highly interdependent economies will impact trade, income and jobs. We rely on a set-up featuring General Equilibrium, imperfect competition and importantly differentiating demand of goods according to their use, for final or intermediate consumption. This authorizes tracing the impact of protection along the value chains, on prices, value added and factor income. Additional tariffs from official lists are taken into account at the tariff line level, before being aggregated within sectors. Beyond the direct toll of sanctions, US exports to the world post a sizeable decrease as a result of reduced competitiveness led by vertical linkages along the value chains. Because of the tariffs in place as of February 2020, three quarters of the sectors decrease their value added in the US. Consistent with political economy determinants, these twists of value added are transmitted to production factors, leading to sizeable creation and destruction of jobs, and reallocation of capital to the benefit of protected sectors, mostly at the expense of their clients. Ultimately, this paper sheds light on the economic consequences of policies disrupting global value chains.

India's textile and clothing industry plays a significant role in the nation's social, cultural, and economic structure. The textile industry is in a unique position to serve as both a growth engine and a tool of inclusive development as India moves closer to its national goal of becoming a Viksit Bharat (Developed India) by 2047. With a workforce of more than 45 million people and a whole value chain that extends from fibre production to finished clothing, the industry has enormous potential to boost employment, exports, sustainability, and regional development. In line with sustainability and innovation imperatives, this paper offers a strategic roadmap to reach USD 100 billion in textile and apparel exports, analyses global competitiveness, assesses policy interventions, and provides a thorough analysis of India's textile ecosystem. In India's economic, social, and cultural framework, the textile and apparel industry plays a crucial role. The industry is anticipated to make a substantial contribution through job creation, export growth, sustainability leadership, and technology-driven transformation as India moves closer to its national goal of becoming a Viksit Bharat (Developed India) by 2047. This study examines how India's textile industry is changing in response to recent shifts in international trade, particularly the US lowering its tariffs on Indian clothing and textiles from previously high levels to about 18%. India's export competitiveness in the US market has significantly increased as a result of this change. Newly signed Free Trade Agreements (FTAs) with the UK and the EU offer diversified and privileged market access. The study makes the case, using secondary data and policy analysis, that India can increase its textile and apparel exports from the current USD 37–38 billion to USD 100 billion by 2030–2035 through a balanced strategy that makes use of improved US market conditions, increases exports to the EU and the UK, and boosts domestic consumption. According to the paper, India's 2047 development vision places the textile industry at the forefront of inclusive, sustainable, and design-led growth. Keywords: Textile and Apparel Industry; Viksit Bharat 2047; US Tariffs; Free Trade Agreements; Export Growth; Sustainability; Design Education, Viksit Bharat, PM MITRA, PLI Scheme

Trade normalization, export quality, and in-migration of skilled workers: Evidence from China

ASEAN countries might function as transshipment platforms for Chinese exports, enabling the evasion of US tariffs imposed on China in the US–China trade war. In response, in November 2019, the Thai government established a watchlist for high‐risk products destined for the US market. This initiative mandates exporters to submit additional documents for thorough verification of the origin of goods. We empirically investigate the impact of this initiative on Thailand's exports to the US, as well as its imports from China. The analysis utilises monthly trade data for Thailand from January 2017 to April 2023. One empirical challenge is the potential presence of reverse causality, in which products experiencing higher export growth to the US may be deliberately selected for inclusion in the watchlist. To address this concern, we focus exclusively on products that meet the criteria for inclusion in the surveillance lists. However, results indicate that the implementation of surveillance using the watchlist does not decrease exports to the US and imports from China.

No AccessPolicy Research Working Papers25 Jun 2013Trade and Production, 1976–99Authors/Editors: Marcelo Olarreaga, Alessandro NicitaMarcelo Olarreaga, Alessandro Nicitahttps://doi.org/10.1596/1813-9450-2701SectionsAboutPDF (0.1 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract:A new database eases the way for researchers analyzing statistics on trade, production, and tariffs. Nicita and Olarreaga have prepared this paper as a companion to the Trade and Production database, which contains trade, production, and tariff data for 67 industrial and developing countries at the industry level for 1976–99. The sector disaggregation in the database follows the International Standard Industrial Classification (ISIC), with data provided at the three-digit level (28 industries) for all 67 countries and at the four-digit level (81 industries) for 24 of these countries. The production data are from the United Nations Industrial Development Organization's Industrial Statistics Database at the three- and four-digit level of ISIC. They include value added, total output, average wages, capital formation, number of employees, number of female employees, and number of firms. The trade data are from the United Nations Statistics Division's Commodity Trade (Comtrade) database (through the World Bank's World Integrated Trade Solution, or WITS, software) and include imports and exports. Data on mirror exports (reported by trading partners) were obtained using WITS. The trade data are aggregated by region and income group, as defined by the World Bank. A separate data set provides bilateral trade flows (by partner) at the industry level. The data on average tariffs (most favored nation) are from the Trains database maintained by the United Nations Conference on Trade and Development and from the World Trade Organization's Trade Policy Reviews and Integrated Database. The database also provides an input-output table for each country using data from version 4 of the Global Trade Analysis Project (GTAP) database. The database is available on request on CD-ROM in a series of ASCII files and Microsoft Excel worksheets. It is also available on the Web at http://www.worldbank.org./research/trade. This paper—a product of Trade, Development Research Group—is part of a larger effort in the group to study the determinants of trade patterns. The authors may be contacted at [email protected] org or [email protected] Previous bookNext book FiguresReferencesRecommendedDetailsCited ByHeterogeneous Firms, Globalisation and the Distance PuzzleThe World Economy, Vol.39, No.923 July 2015How Does Trade Facilitation Affect International Trade?The European Journal of Development Research, Vol.27, No.121 August 2014PRODUCTIVITY MATTERS FOR TRADE POLICY: THEORY AND EVIDENCE*International Economic Review, Vol.52, No.124 February 2011A test of trade theories when expenditure is home biasedEuropean Economic Review, Vol.53, No.7Labour Market Regulations and the Sectoral Reallocation of Workers: The Case of Trade ReformsReview of Economic Studies, Vol.76, No.4International Trade, R&D Spillovers and Productivity: Evidence from Indian Manufacturing IndustryJournal of Development Studies, Vol.45, No.8Do countries free ride on MFN?Journal of International Economics, Vol.77, No.2Trade Integration in Manufacturing: The Chilean ExperiencePanel Cointegration Estimation of International Knowledge SpilloversGlobal Economic Review, Vol.37, No.1The Dynamics of International Trade PatternsReview of World Economics, Vol.143, No.3A re-evaluation of the impact of regional agreements on trade patternsÉconomie internationale, Vol.n° 109, No.1The effectiveness of international knowledge spillover channelsEuropean Economic Review, Vol.50, No.8Trade Barriers as Bargaining OutcomesThe World Economy, Vol.29, No.4International R&D Spillovers RevisitedOpen Economies Review, Vol.16, No.3Direct versus indirect international R&D spilloversInformation Economics and Policy, Vol.17, No.3Industrialization in an age of globalization: some comparisons between East and South East Asia and Latin AmericaOxford Development Studies, Vol.32, No.2Trade integration and business cycle co-movements: the case of Korea with other Asian countriesJapan and the World Economy, Vol.16, No.2 View Published: November 2001 Copyright & Permissions Related RegionsAfricaEurope and Central AsiaRelated CountriesBoliviaChinaCubaSingaporeUgandaRelated TopicsFinance and Financial Sector DevelopmentInternational Economics & TradeLaw and DevelopmentMacroeconomics and Economic GrowthPrivate Sector DevelopmentPublic Sector DevelopmentSocial Protections and Labor KeywordsBILATERAL TRADECDECONOMIC COOPERATIONECONOMIC RESEARCHEXPORTSGOODSINCOMEINCOME LEVELSINTERNATIONAL TRADEPRODUCTIONTARIFF BARRIERSTOTAL OUTPUTTRADETRADE POLICYVALUEVALUE ADDEDVARIABLESWAGESWORLD TRADE ORGANIZATIONWTO PDF DownloadLoading ...

This study uses a qualitative research method, This study is descriptive, and the methods used in this study use various methods, starting from collecting data related to the object of research, data analysis, and the data obtained is analyzed and interpreted into written form. So in this study, the qualitative method will be the basis for explaining Donald Trump's policy in raising import tariffs. Donald Trump is the 45th president of the United States who won over his rival Hillary Clinton from the Democrats in the United States presidential election. The economic policy of the United States during the Trump era is Protectionism, President Trump has made tariffs the mainstay of his economic strategy. He restored America's trade balance, reducing the gap between how much the US buys from other countries and how much the US sells to other countries. Trump has announced a series of new tariffs that include base tariffs for all countries as well as additional tariffs of varying amounts for each country. the impact of US tariffs on international trade: geopolitical changes and business opportunities, the impact of US tariffs on the global economy, geopolitics and the formation of new alliances, geopolitics and the formation of new alliances.

Applying a computable general equilibrium model to assess the impact of tariffs between the US and China, Taiwan stands to gain from trade diversion of the trade war between the two largest world economies in the short term.Initially, Taiwan suffered a minor loss from the sector-specific tariff on steel and aluminum imposed by the US. However, its loss is mitigated after counting counter measures from foreign countries. The cumulated US tariffs and China's retaliations led to trade diversion effect. Taiwan's initial loss from the steel and aluminum tariffs was over compensated by a series of trade war between the US and China.Under the scenario of the cumulated tariffs of $250 billion of US imports and China's retaliations of $110 billion on US goods, the social welfare, exports, import and trade balance in Taiwan increased. Its terms of trade improved as well. Real wage increases slightly more for unskilled labor than for skilled labor. The short-term effect of the trade war has positive effect on all macro indicators of Taiwan's economy.On sectoral shift, Taiwan's export will gain the most in precision engineering products ($2,941.6 million), followed by electronics ($310.7 million) and agricultural products ($31.3 million). The negative effects are in sectors such as business services ($58.323 million), other services ($46.9 million), transportation service ($36.6 million), trade service ($25.3 million), and finance service ($24.5 million). Taiwan's total imports will increase by 0.59%, whereas its total export will increase by 0.33%. However, total trade balance still increases by $451.1 million.The study also finds that Taiwan has a high degree of overlapping export commodities with China in the US market, much higher than most major trading partners for the US, yet its market share for those products in the US is ranged from 1% to 5% only. Moreover, more than 60% of Taiwan's export to the US is in intermediate goods which have less product differentiation than those in final consumption goods. These two factors will provide an opportunity for Taiwan to exploit the US market.Though the short-term effect of trade war is positive, Taiwan needs to have a long-range planning amid the external shocks. Policy implications for Taiwan are to map out a cosmopolitan view of its geo-strategy by diversifying outward foreign direct investment and trade destinations. It needs to reduce the “systemic risk” of relying on single market in China which is vulnerable to the uncertainty in the US–China relations. If the trade war lasts too long, Taiwan would need to reevaluate its triangular trade-investment nexus with China and the US as well as its role in the global supply chain.

In his 1995 paper for the twenty-fifth anniversary of the Brookings Papers on Economic Activity, Krugman identifies several new aspects of modern world trade. One of them is the ability of producers to slice up the value chain, breaking the production process into many geographically separated steps. This phenomenon is commonly known as foreign and it is the outcome of globalization of the world economy in the last two decades. This paper develops a general equilibrium model that features the North's outsourcing to the South, with 3 countries (2 in the North and 1 in the South) and three goods (labor intensive good, intermediates and capital intensive good). The North-South trade patterns are characterized by the North's export of capital intensive good to the South and its import of intermediates and labor consumer good from the South. The intermediates enter the production of the capital-intensive good. The policy issue that motivated this study is the debate on China's MFN (most favored nations and now called normal trade relations) in the US in the past 10 years. While the US threats to revoke MFN, its competitors, namely, EU, Japan and NICs (EJN) do not. These countries compete in the world high-tech marketplace and at the same time outsource heavily to China. This paper applies the above model to analyze the price, output and welfare effects of tariffs on Chinese imports to the US. The first part of the paper sets up a perfect competition benchmark framework. It gives the conventional results of the tariffs. As a large country, the US tariffs on import from China change the terms of trade to its favor and its welfare improvement comes solely from its terms of trade gains. The same is true for EJN. China suffers a welfare loss due to the worsening of its terms of trade. It also shows that the tariffs contribute to the further integration between the EJN and China in production of the capital-intensive good, with more EJN outsourcing to China. The opposite happens to the US and China. As a result, EJN takes more comparative advantage of China and its own and therefore has a bigger market share in the world market place for the capital-intensive good. The second part of the paper extends the analysis to the imperfect competition in the capital-intensive good production. By so doing, some of the results obtained in the PC case are altered and others are not. Like in PC case, the tariffs improve the terms of trade for the US and EJN. It also reduces the US market share and increases the EJN market share in the capital-intensive good sector. For China, it allocates more resource from labor-intensive good sector to intermediates sector, and exports more intermediates to the EJN but less to the US. It also reduces the US real profit and increases the ENJ's real profit in capital-intensive good sector. The real profit term is equivalent to an efficiency term and it makes ambiguous. This leaves open the possibility of a welfare loss for the US. The world economy as a whole, however, suffers an unambiguous welfare loss.

The analysis revealed incentives for foreign direct investment (FDI) for the US fruit and vegetable industry. A relationship was found between US tariffs on fruits and vegetables and FDI by US produce firms in Latin America. Other factors affecting FDI were also investigated. The analysis revealed that a majority of the commodities produced as a result of FDI by US fruit and vegetable firms were exported to the United States. Significant implications for the US market in light of trade agreements such as NAFTA are presented. These implications include the likelihood of increased FDI and a more globally oriented marketplace for the US fruit and vegetable industry. © 1998 John Wiley & Sons, Inc.

Significance However, it appears to have done so in no small part due to geopolitics rather than the strength of its own economy. Chinese investments and Mexican imports of Chinese products have surged in Mexico in recent years, suggesting that China is using the country as a back door to the US market, circumventing US tariffs on Chinese goods. Impacts US firms will continue diversifying their exposure to Chinese risk. A second Trump presidency would add pressure to Mexican authorities on trade policy. Mexico will try to address rule of law, logistics, energy and human capital challenges fully to harness nearshoring investment potential.