US trade policy uncertainty on Chinese agricultural imports and exports: An aggregate and product-level analysis

Abstract

This paper empirically investigates the impact of US trade policy uncertainty on China's agricultural imports and exports by using Chinese aggregate and product-level data. First, we find that increased US trade policy uncertainty has reduced China's agricultural exports to the US and imports from the US, with effects that outweigh traditional exchange rate factors. Second, increased US trade policy uncertainty has raised China's total agricultural imports from the world as it shifts from North America to South America, Europe, and Asia. Third, the product-level analysis suggests that increased US trade policy uncertainty will not threaten China's food security but will lead to higher import prices for some important products. This study enriches our understanding of the effects of trade policy uncertainty and provides insights for the government to prevent large fluctuations in agricultural markets and stabilize the national economy.