Additional Tariffs Research Articles

Impact of the US-China Trade War on Bystander Countries

Abstract: This paper evaluates the impact of US-China trade war on bystander countries (untargeted by additional tariffs) by analysis of changes in import value of 9 taxed products from China and other 11 bystanders in the US from 2018 to 2019. The paper reveal incomplete substitution of Chinese imports on average after adoption of tariffs targeting China. The difference in value between decline of imports from China and aggregated growth of imports from other 11 countries are termed the gaps. The gaps are explained in four aspects: a) supply elasticity; b) heterogeneity across countries; c) global value chain; d) increased use of domestic products. In beneficiary-level, bystanders are divided into large beneficiaries, small beneficiaries and losers. This paper provides suggestions in firm-level, product-level and country-level to help bystanders take advantage of the trade war, which involve efficient reallocation of resources and transformations. Improved positions of countries except for the US and China contribute to both global economic growth and development and multi-polarization in the world.

WP2.6 - Improving theatre utilisation and reducing waiting list times – could ‘standby’ patients be the answer?

Abstract Aims With the NHS waiting list at a record high of over 7.3 million patients, it has never been more important to maximise theatre productivity. We piloted a ‘standby patient’ initiative for patients awaiting elective day-case procedures, with the aim of optimising theatre utilisation, reducing waiting lists, improving hospital revenue and ultimately patient care. Methods The principle of a ‘standby’ patient is to reduce the rate of ‘on the day’ cancellation and utilise theatre time. Suitable patients were offered the opportunity to be on ‘standby’ for selected day case lists. If list capacity allowed, the patient was called in. If postponed, they were offered a dedicated date. A patient questionnaire was also conducted to gain an understanding of the ‘standby’ patient experience. Results Between May and November 2023, 12 ‘standby' patients were identified, average waiting list time of 44 weeks. Cases included hernia repairs and laparoscopic cholecystectomies. 6/12 were operated on their standby slot, 1 patient cancelled, and 5/12 were postponed but had surgery within an average of 6 weeks. This earnt the trust approximately £15240 in additional tariff. 10/12 patients responded to the patient questionnaire with all reporting either good or excellent experience of the initiative. Positive comments included ‘good communication’ and ‘excellent standard of care’. Conclusion The standby patient initiative is well received by patients, and provides a cost-effective solution to optimise theatre utilisation, reduce waiting list times, and improve patient care. Following this successful pilot, we plan to introduce the standby patient across further surgical lists within the trust.

The Impact of U.S. Economic Policy Uncertainty on the RMB: U.S. Dollar Exchange Rate - Case of China-US Trade War

On 6 July 2018, the United States began to impose 25% tariffs on $34 billion of Chinese goods. The trade war between China and the United States was officially launched. It lasted for more than a year, during which the two sides experienced six mutual tariff increases, which significantly impacted a few fields in China and the United States. This paper selects the RMB exchange rate to the US dollar as the research object; and takes the return of the RMB exchange rate as the data basis for modelling and analysis, intercepts its return data in the five years before and after the US-China trade war, taking the time when the United States imposed six additional tariffs on China as a dummy variable, and analyses the data by using the ARMA-GARCH model to study the impact of the RMB exchange rate by this trade war and to make predictions development of the RMB exchange rate, which will then make suggestions for China's economic.

Politically Affiliated Analysts

Government ownership of financial intermediaries is pervasive around the world. In this study, we examine the impact of common government ownership between the brokerage and listed firms on the information production role of brokerage firms. We show that affiliated analysts tend to issue more optimistic recommendations for stocks of firms controlled by the same government entity that controls their brokerage firms. This optimistic bias is particularly pronounced during periods of economic shocks. Our study demonstrates this by utilizing additional tariff impositions and tariff exemptions during the U.S.–China trade war as exogenous negative and positive shocks, respectively. Additionally, our study indicates that stocks recommended by politically affiliated analysts tend to underperform those recommended by independent analysts, implying that the optimism stems from conflicts of interest rather than superior information. Furthermore, our research highlights that sophisticated investors perceive the potential bias and incorporate it into their trading. Consistent with an exchange of favors story, politically affiliated brokerage firms receive a larger allocation during the issuance of local government debt, whereas governments subscribe for more shares during seasoned equity offerings by these affiliated brokerage firms. This paper was accepted by Kay Giesecke, finance. Funding: The authors gratefully acknowledge the financial support from the National Natural Science Foundation of China [Grants 71972088, 72132002, and 71991473], the National Social Science Foundation of China [Grants 21ZDA010 and 22VRC145], and the Innovation and Talent Base for Digital Technology and Finance [Grant B21038]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.00579 .

Global trade patterns in the wake of the 2018-2019 U.S.-China tariff hikes

In 2018, the U.S. government announced bilateral tariff increases on a number of Chinese goods. Thus began a tit-for-tat exchange of increasing bilateral tariffs between the U.S. and China until, by the end of 2019, most of the goods traded between the U.S. and China were subject to additional tariffs. In this note, we use Census and UN Comtrade data to study the effects of the 2018-19 U.S.-China tariff hikes on global trade patterns.

A Study of Global Trade War and Its Impact on Indian Economy

A Study of Global Trade War and Its Impact on Indian Economy

To what extent did US-China trade war affect the global economy

This research paper discusses the impacts on the global economy and international market affected by the US and China trade war, which started in 2018-19. Led by the previous president of the US, Donald Trump, succeeded by the current president Joe Biden, trade protectionism was brought out to restrict Chinese exports to the US. Due to political, social, economic, and many other factors, both US and China ended up imposing additional tariffs on each other’s imports and setting up more and more restrictions on the international market. These imposed trade barriers between the two major economies in the world significantly influenced the two countries themselves, other bystander economies, and the international market balance. The paper discusses and reveals how the economic conflict affects US and China, both consequences and benefits, and how some countries found opportunities from this conflict, and some resulted in losses. Suggestions for possible solutions which each government can take are also being explained.

Trade Destruction and Trade Deflection: A Quasi-Natural Experiment Based on the US Additional Tariffs

Trade Destruction and Trade Deflection: A Quasi-Natural Experiment Based on the US Additional Tariffs

How exporters neutralised an increase in tariffs

AbstractI use the unanticipated and large additional tariffs the US imposed on European Union products due to the Airbus‐Boeing conflict to analyse how exporters reacted to a change in trade policy. Using firm‐level data for Spain and applying a difference‐in‐differences methodology, I show that the export revenue in the US of the firms affected by the tariff hike did not significantly decrease relative to the one of other Spanish exporters to the US. I show that Spanish exporters were able to neutralise the increase in tariffs by substituting Spanish products with products originated in countries unaffected by tariffs and shifting to varieties not affected by tariffs. My results show that tariff avoidance is another margin exporters can use to counteract the effects of a tariff hike.

Making Sense of the Trump Tariff: Evidence from the Exclusion Request

During the Trump administration, the United States invoked Section 301 of the Trade Act and imposed significant tariffs on Chinese imports. As a result, a large portion of Chinese goods were subject to additional tariffs. Concurrently, the U.S. administration introduced a trade remedy system called exclusion requests to minimize the damage inflicted on American companies that import goods from China. In this paper, we analyze the exclusion requests to shed light on the impact of the 301 tariffs. A thorough analysis on the exclusion requests would provide better understanding of the impact of Section 301 tariffs and Trump trade policy. The analysis revealed that when an exclusion request was made for products falling under HTS 84 or 85 that are also closely associated with “Made in China 2025”, the likelihood of approval significantly decreased.

International trade friction and firm cash holdings

In 2017, the United States launched a "301″ investigation, imposed a series of additional tariffs on China, which led to the US-China trade war. In this paper, we investigate the impact of the trade war on firms' cash holdings in the context of China. Our results indicate that the trade frictions have significantly increased cash holdings of manufacturing firms. This effect arises mainly through the channel if increased trade policy uncertainty. Our findings offer direct evidence and guidance for both firm strategy and policymakers in the important trade friction.

Analysis of the Impact of CPTPP Membership on the Korean Economy

Purpose - As of 2022, Korea’s dependence on trade was 75%. Korea must join the Comprehensive Progressive Trans-Pacific Partnership (CPTPP) in order to keep pace with US-led trade standards in the future. This paper empirically investigated the impacts of Korea’s participation in the CPTPP on the economy. Design/Methodology/Approach - Using the World Input-Output Database and regression analysis, Korea’s CPTPP membership expands trade with 11 countries, including Japan, contributing greatly to the growth of the Korean economy. Findings - Our main findings can be summarized as follows. In 2022, exports and imports to Japan were $30.6 billion and $54.7 billion, respectively. If Korea joins the CPTPP, the economic effect will increase GDP by about 1.7% every year, and is expected to be more than $40.3 billion in 2025. The CPTPP has a great impact on the Korean economy by expanding trade with 11 countries, including Japan. Although Korea already has FTAs with 9 TPP member countries, it has been found that Korea’s GDP expands through additional tariff and non-tariff trade expansion by joining the CPTPP. Research Implications - Existing studies focus on the benefits of Korea on joining the CPTPP. This paper attempts to firstly evaluate the impact of joining the TPP on the Korean economy via analysis of the World Input-Output Database (WIOD).

Market reactions to trade friction between China and the United States: Evidence from the soybean futures market

In March 2018, the US used an immense trade deficit as an excuse to provoke trade friction with China. This study uses the EGARCH model and event study methods to study the impact of the major risk event of Sino-US trade friction on soybean futures markets in China and the United States. Results indicate that the Sino-US trade friction weakened the return spillover effect between the soybean futures markets in China and the US, and significantly increased market volatilities. As the scale of additional tariffs increased, the volatility of the Chinese soybean futures market declined; however, the volatility of the US soybean futures market did not weaken. In addition, expanding the sources of soybean imports helped ease the impact of tariffs on China’s soybean futures market, while the decline in US soybean exports to China intensified the volatility of the US soybean futures market. In addition, while the release of multiple tariff increases has had a short-term impact on the returns of soybean futures markets, the impact of trade friction has gradually decreased.

Adjusting intervention of trade war subjective feelings: An analysis of the relationship between psychological characteristics and mental health of foreign trade workers

BackgroundWith the development of the economy and society and the further increase of social competition pressure, people often encounter some difficulties or pressure in academics, employment, economy, interpersonal relationship, marriage and other aspects. Mental health problems occur frequently. The burden of illness caused by mental health is growing. In recent years, it has had the greatest impact on our country’s foreign trade industry. The most profound social event is the China–United States trade war. On March 22, 2018, the US announced an additional 25 percent tariff on $60 billion of Chinese goods. On March 23, China retaliated by imposing additional tariffs on $3 billion of imported goods from the US, marking the official start of the “China–United States trade war”. Mental health is an important part of people’s health. Without a healthy mind, there will be no healthy life. In recent years, with the rapid development of the global mental health movement, the attention of all walks of life to mental health has reached a new height. The researchers investigated or studied the mental health status of teachers, school students, police officers, medical personnel, workers, left-behind children, sailors and supervised personnel from various perspectives. Based on the above, the study analyzes the impact of the trade war on the psychological characteristics and mental health of foreign trade employees and the relationship between them, in order to improve the anxiety of foreign trade employees.Subjects and MethodsThe research data was obtained through a questionnaire survey. At the beginning of the questionnaire, unified guidance is used to introduce the nature, purpose and filling method of the survey. The respondents are asked to select the corresponding answer for each item in a secret way according to their actual situation. The questionnaire is distributed centrally and filled out separately. The original data obtained from the questionnaire contains 438 samples, some of which have problems such as the mission of question filling, inconsistency of key information, and continuous selection of the same options in each question of the same scale, which need to be excluded. After pretreatment, the sample size was 354, and the sample effective rate was 81%. Stata16.0 software and SPSS22.0 software were used for the calculation and statistics of relevant data.Figure 1.Scores of index of Well-Being scale before and after the interventionResultsAs shown in Figure 1, under the psychological intervention of trade war subjective perception adjustment for foreign trade practitioners, scores of all index of Well-Being scales were significantly higher than before the intervention (P < 0.01).ConclusionsThe results of this study show that after the intervention mechanism of trade war subjective perception regulation, all the scores of indexes of Well-Being scale are significantly higher than before the intervention (P < 0.01), indicating that the trade war subjective perception regulation mechanism is intervening in the psychology of foreign trade practitioners, which can improve the work happiness of foreign trade practitioners. Avoiding social events such as the China–United States trade war may aggravate their psychological symptoms and reduce their mental health.

Designing ‘optimal’ sanctions on Russian imports

AbstractRestricting Russian imports is an important instrument in Allies' sanction toolbox. Rather than arbitrarily choosing the set of targeted imported products and the level of import tariff increases (as is typically done in the literature), we follow the recent contributions on ‘optimal sanction’ strategies. We apply a workhorse computable general equilibrium (CGE) model, GTAP, in a way that enables us to endogenise the scope of sectors targeted, the magnitude of tariff increases and the disbursement of tariff revenues. This allows us to identify sets of Allied import restrictions that best achieve the Allies' objectives of inflicting the highest economic pain on Russia while at the same time keeping self‐harm to Allies as low and as equitably distributed as possible. With regard to scope, we find that, instead of targeting Russian imports across the board, the Allies fare better when limiting their import sanctions to products from the eight most‐imported Russian sectors. Regarding optimal tariff levels, we find that, rather than imposing all‐out import bans, tariff increases in the range of 20–25 percentage points best achieve the Allies' objectives. Finally, the Allied coalition could benefit from a burden‐sharing arrangement in which proceeds generated from the additional tariff rents are redistributed among Allies, and other cash transfers are allowed for. Doing so would result in a more equitable distribution of economic losses among Allied countries—at hardly any additional ‘cost’ to the coalition (in terms of extra losses to Allies or reduced losses to Russia). Such arrangement could significantly strengthen cohesion, resilience, and longevity of the Allied coalition, and thus ought to become a component of an optimal sanction strategy. As an alternative to redistributing tariff rents among coalition countries, Allies could consider using those funds towards supporting Ukraine directly. Doing so would involve a small sacrifice by Allies and would scarcely compromise the effectiveness of Allied sanctions. However, it could greatly help mitigating the human catastrophe unfolding in and around Ukraine.

Impact of the trade war between the USA and China on the development of foreign trade in the Asian region

The article presents and analyzes the dynamics of foreign trade indicators between the US and China for the period 2000–2021 (exports, imports, the share of China and ASEAN countries in US imports, the share of telecommunications equipment in US imports). It is established that in the USA and China, but especially in the USA, it is politics and not economic interests that dominate the development of bilateral relations. It is noted that ASEAN countries are very sensitive to changes in the trade of the Asia-Pacific region, and Southeast Asia has a long the history of trade «shocks». It is established that the trade war has led to significant losses for both economies, the consequences of the US-China bilateral trade dispute take several forms, trade tensions between the US and China persist, and its impact extends beyond the current period. It has been determined that Vietnam is best positioned to benefit from trade and investment. China's new industrial policy is expected to increase the substitution of domestic for imported inputs in the manufacturing supply chain, a move that will hurt ASEAN parts and component exporters such as Thailand and Malaysia. The China-American trade dispute has completely changed the ecology of international trade. Now the threat of tariffs has become a bargaining tool for business and broader goals. Even if China and the United States finally reach a trade deal, at least some of the additional tariff measures imposed by Washington on imports from the mainland are estimated to remain in place for a long time. In fact, even if the United States agrees to remove the tariffs now, and if there are problems in the future with the implementation of the agreements reached by the two sides, there is no guarantee that the same tactics will not be repeated. Since the Belt and Road Initiative is recognized and implemented in more and more countries, China may already to some extent overestimate the importance of economic and trade relations with the United States. In fact, China has not benefited as much as it seems from its economic and trade relations with the United States: the trade deficit has encouraged the emission of dollars, and the United States has gained a large amount of international seigniorage. As for the US foreign trade policy, it will continue to be aimed at supporting, promoting and protecting national producers in world markets.

Multi-product exporters in US–China trade war

ABSTRACT This study explores empirically how Chinese multi-product firms adjust their exports in response to the U.S. tariff escalations during the US–China trade war, using firm-product-level customs trade data from China. We find strong evidence for a new phenomenon we call the within-firm cross-product chilling effect, whereby an additional tariff targeting some of the firm’s products sold in the destination market is associated with reduced sales of its other untargeted products in that market. The comparison between firm-product-level and product-level analysis suggests that ignoring the within-firm chilling effect would result in a severe underestimation of the tariff effects. Moreover, the chilling effect is more prominent for products that are more important for a firm’s overall sales to the U.S. and that are highly reliant on the U.S. market. We also observe a ‘complete tariff pass-through’ phenomenon at firm-product level, which complements the product-level evidence in previous related studies.

The US- China trade war: Causes and Effects

This paper studies the US-China trade war currently being initiated by the US in early 2018 from a US standpoint. This paper starts by introducing the chronology of the trade war. With the findings, we attributed the causes of the US-China trade war to three main reasons: US intentions to reduce the trade deficit, block China’s access to core technologies, and close the government deficit gap. In contrast to President Trump’s optimistic expectation that the US would benefit, the trade war became a lose-lose game. The trade war's escalation, which included both additional tariffs and restrictions on the transfer of high-tech products, had a negative impact on domestic consumers, businesses, and employment, further slowing down the US economic growth.

The Global Value Chain and Welfare Effects of Tariffs—Counterfactual Analysis of Sino–US Economic and Trade Frictions

This paper aims to study the impact of Sino–US (China–United States) trade frictions on global value chains and welfare changes. We introduce the general equilibrium model for multi-country and multi-sector heterogeneous enterprises and combine it with an input–output structure. The results show that the additional tariffs on China and the US reduce bilateral trade and affect the overall imports and exports of both countries to varying degrees. The results show that the additional tariffs on China and the US affect both countries’ overall imports and exports to varying degrees. The impact of the trade of manufactured goods is greater than that of the trade of intermediate goods. The welfare effect in China has dropped by 0.163%, while the corresponding effect in the US has improved by 0.016%. The main reason for the decline in China’s welfare is the deterioration of the terms of trade. Increased tariffs between China and the US can reduce bilateral trade between the two countries, particularly in intermediate goods, and can cause a reorganization of global value chains in both regions.

China–US Economic and Trade Relations: Trump and Beyond

In the final year of Trump’s tenure, China and the US put the trade war on hold by signing their phase-one economic and trade agreement, but the COVID-19 pandemic has brought new challenges to the China–US economic and trade relations. The US trade and economic policies toward China advocated by Trump had to be suspended due to his failure to win the re-election, demonstrating that his economic and trade strategy for China has ended in failure. However, the succeeding Biden administration has not totally abandoned the overall design of Trump’s economic and trade policies toward China, and has continued the core policies of imposing additional tariffs on China and maintaining the US economic competitive advantage. After the collision during the Trump administration, the China–US economic and trade relations still show the fundamental characteristics of complementarity and mutual benefit. Under the Biden administration, the renewal of the phase-one economic and trade agreement, the transformation of the economic alliance, the security of the supply chain, the coordination of global economic issues in the post-pandemic era, etc. will become the new focuses of China–US economic and trade relations.