Trade Tariffs Research Articles

Dynamics of Sino-American relations: A decade-long analysis using topic modeling

Abstract. This study explores the thematic evolution of Sino-American relations over the past decade using Latent Dirichlet Allocation (LDA) topic modeling. We compiled a comprehensive dataset of academic papers, news articles, government reports, and social media posts, focusing on themes such as economic competition, technological rivalry, military strategy, diplomatic maneuvers, and ideological conflict. Our analysis identifies key sub-topics within these themes, including trade tariffs, 5G technology, and military expenditures, providing a nuanced understanding of the factors influencing bilateral relations. Temporal trends highlight the shifting prominence of these themes, with economic competition and technological rivalry becoming increasingly salient. Additionally, the concept of financial hegemony, particularly the role of the U.S. dollar, emerges as a significant driver of U.S. policy. This study offers insights into the strategic motivations behind U.S. actions and the complex interplay of various factors in Sino-American relations.

COVID, elite rhetoric, and Americans’ attitudes toward U.S. trade practices with China

AbstractObjectivesIn this article, we consider how the COVID‐19 pandemic and evaluations of Donald Trump combined to influence Americans' attitudes toward U.S. trade practices with China. We suggest that psychological factors—such as confirmation bias and transfer of grievances—influence how individuals evaluate the costs and benefits of trade. Specifically, we argue that the severity of the pandemic (reflected by both cumulative deaths and news coverage of the pandemic) and the rhetoric of (then) President Trump came together to influence Americans’ attitudes toward trade with China.MethodsTo assess the COVID effect, the Trump effect, and their interaction effect on trade opinion, we merge data from 39 waves of the weekly Nationscape surveys, conducted from October 2019 to July 2020 (N = 62,171), with data on weekly COVID coverage for nine national news sources and cumulative state‐level weekly data on COVID‐related deaths. We estimate our models using hierarchical ordered logit.ResultsOur findings suggest that COVID‐related news coverage, cumulative COVID deaths, and Americans’ favorability toward Donald Trump have strong positive effects on Americans' support for trade tariffs on Chinese imports. Further, we find that the effects of COVID deaths on attitudes toward China tariffs are moderated by Trump favorability, with the effect of COVID deaths significantly stronger among Trump favorables.ConclusionThe COVID pandemic and evaluations of Donald Trump worked both independently and together to shape Americans’ attitudes toward China tariffs.

A Bridge Too Far: Africa’s Food Security and the WTO Agreement on Agriculture

Food and agriculture were largely treated as exceptions from the GATT disciplines. The GATT Uruguay Round Agreement on Agriculture (AoA) initiated a long-term process of trade liberalisation in agriculture. Food security is among the objectives of the AoA. Trade liberalisation in agriculture, the removal of protectionism, and tariffs in agricultural trade are envisioned as food security enhancing. However, although African countries embraced the WTO AoA, they have failed to liberalise their agricultural trade in line with the disciplines of the AoA. African countries have missed out on the benefits of agricultural liberalisation, among them being food security. As a result, Africa’s agricultural trade is anaemic and, coupled with her low agricultural productivity, Africa is plagued by hunger.

A Game-Theoretic Analysis of the Interaction Between Embargoes, Price Caps and Tariffs in EU-Russia Gas Trade

A Game-Theoretic Analysis of the Interaction Between Embargoes, Price Caps and Tariffs in EU-Russia Gas Trade

Embracing the African continental Free trade Area: Unpacking Malawi’s economy response to trade liberalization

The impact of trade liberalization on Malawi’s economy has been a hotly debated topic. To shed light on the subject, a study was conducted using the PEP-1–1 CGE model and the latest Malawi’s Social Accounting Matrix (SAM) from 2019. The results were eye-opening, revealing the potential effects of the African Continental Free Trade Area (AfCFTA) on various sectors of the economy. The removal of trade tariffs is predicted to have a significant impact on prices, with a decrease of 26.31% in the agricultural sector alone, services (−7.88%), public administration (−9.92%), and manufacturing and industry (−11.23%) imposing hopes of improving food affordability and food security. However, it is expected to have adverse impacts on wage rates in the agricultural sectors (−18.78%), manufacturing and construction (−19.01%), services (−2.79%) and public administration (−15.81%). Additionally, while exports are expected to increase, the country’s balance of payments may suffer as imports are likely to outweigh foreign earnings. This could also lead to a decrease in government revenue from taxes. To mitigate these effects, the study suggests implementing export restructuring strategies, particularly in industries like manufacturing and construction, and promoting diversification of local production to boost competitiveness and improve wage rates. With these measures in place, the government will not only offset potential losses but also tap into new sources of taxable income.

Product market competition and audit fees: new evidence

PurposeThe purpose of this study is to examine the relation between product market competition and audit fees by using firm-level product market competition measures and mitigating the endogeneity issues.Design/methodology/approachThis study uses 12,136 US firms from 2004 and 2019. To ensure the robustness of the main findings, this study uses three firm-level product market competition measures and import trade tariff rate reductions of the USA as a quasi-natural experiment. This study also performs three cross-sectional tests and validation tests.FindingsThis study demonstrates that there is a negative relation between product market competition and audit fees and establishes a causal relation. Moreover, it reveals that the findings become more pronounced when auditors possess industry-specific expertise, when client firms are younger, and when operating within more homogeneous industries. Additionally, a validation analysis supports the findings.Practical implicationsThis study offers significant insights for regulators by highlighting how product market competition plays a constructive role in overseeing firm management.Originality/valueThe authors contribute to the existing literature by showing that there is a negative association between product market competition and audit fees after controlling external monitoring mechanisms. The authors also find the causal relation. These findings indicate that competitive pressures originating from product markets exert a significant influence on disciplining a client firm’s management.

Trade War Between US and China

This paper examines the US-China trade war (2018-2019) and its multifaceted impact on globalization. It explores the causes of the conflict, including China's alleged unfair trade practices and the US trade deficit. The research analyzes the war's consequences on both nations, encompassing economic disruptions, job losses, and agricultural decline. Additionally, the paper investigates the impact on other countries, with some benefiting from trade diversion while others facing economic strain. Finally, the involvement of US multinational corporations (MNCs) is explored, considering their potential support for some trade war goals while opposing increased tariffs that burden their operations. Keywords: US-China Trade War, Globalization, Trade Tariffs, Unfair Trade Practices, Trade Deficit, Economic Disruptions, Job Losses, Agricultural Decline, Trade Diversion, Multinational Corporations (MNCs)

Long-term effect of trade liberalization on human capital: evidence from Chinese students

ABSTRACT This study examines the long-term effects of trade liberalization on human capital accumulation for students, specifically through schooling decisions. To establish this linkage, I leverage the significant reduction in trade tariffs following China’s WTO accession in 2001 as an identification strategy and construct the shift-share instrument variable for each Chinese prefecture’s exposure to trade shock. Utilizing cognitive test scores from the China Family Panel Studies (CFPS) dataset for cohorts aged between 13 to 20 at the time of trade liberalization, I find that the trade shock leads to a decline in cognitive test scores approximately 15 years later. Furthermore, combining CFPS data with the China Population Census, I demonstrate that export expansion has resulted in a reduction in university enrollment and less education years among youth.

Capital controls and trade policy

How does optimal capital-flow management change with prevailing trade policies? We study the joint optimal determination of capital controls and trade tariffs in a two-country, two-good model with trade in goods and assets. Because countries are large in both markets, a country-planner can achieve higher domestic welfare by departing from free trade in addition to levying capital controls, despite the cooperative optimal allocation being efficient. However, time variation in the optimal tariff induces households to over- or under-borrow through its effects on the path of the real exchange rate. As a result, optimal capital controls are generally smaller when trade policy is constrained (i.e., by a Free-Trade Agreement), but, absent retaliation, can be larger depending on the paths of underlying fundamentals.

Does the COVID-19 pandemic exacerbate the disincentive effect of trade tariffs on global value chains (GVCs) embeddedness?

Does the COVID-19 pandemic exacerbate the disincentive effect of trade tariffs on global value chains (GVCs) embeddedness?

SPLITTING THE DIFFERENCE IN INCOMPLETE‐INFORMATION BARGAINING: THEORY AND WIDESPREAD EVIDENCE FROM THE FIELD

AbstractThis article documents a robust pattern from diverse sequential bargaining settings: agents favor offers that split the difference between the previous two offers. Our empirical settings include used cars, insurance claims, home sale, trade tariffs, a TV game show, eBay, and auto‐rickshaws. These even‐split offers are more likely to be accepted, less likely to spur exit by the opponent, and more likely to be followed by subsequent split‐the‐difference offers if bargaining continues. We propose several theoretical frameworks to explain this behavior, including an inference argument under which split‐the‐difference offers can be viewed as an equal split of the potential surplus.

REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP: REGULATION OF FOREIGN TRADE

The world's largest free trade area in terms of GDP and population – the Comprehensive Regional Economic Partnership (CEP) – has been operating since January 2022. It includes 15 countries of the Asia-Pacific region: China, Japan, the Republic of Korea, all ASEAN countries, Australia and New Zealand. The main agreements within the framework of the VREP relate to the liberalization of foreign trade in goods with the prospect of liberalizing the services market, mutual investments and labor market regulation. The VREP maintains import tariffs in trade between member countries for 20 years. The exception is Singapore, where there are no import duties. The agreement details the procedures for determining the origin of the goods. It provides for an acceleration in the rate of tariff reduction and a departure to previously reached agreements in the case if the existing level threatens the interests of the national economy. The article considers the specifics of regulating tariff policy in the trade of fuel, ferrous metals and clothing, as well as import tariffs on basic foodstuff (cereals and meat) for the most densely populated countries of the European Economic Area. It is noted that import tariffs are absent or reduced for raw materials (coal, oil), but remain the same for manufacturing products (petroleum products, rolled products and ferroalloys). In terms of clothing, both developing and developed countries defend certain positions. There are positions on food (rice, chicken meat) protected by most member countries. The author notes that the interests of food security are more important than the requirements of trade liberalization.

Analisis pengaruh perang dagang AS-China bagi kondisi ekonomi ASEAN-4 periode 2017-2020

International trade is the exchange of goods and services between citizens of two or more countries by mutual agreement. However, the increasingly intensive trade can trigger conflicts during trade, which are called trade wars. The current trade war between the United States and China is playing with each other's trade tariffs. This research analyzed the influence of the US-China Trade Balance, ASEAN balance of payments, and imports related to ASEAN-4 economic conditions. This observation selects secondary data from the World Bank, International Monetary Fund (IMF), and CEIC Data. The data used in this research is panel data on 4 ASEAN countries, including Indonesia, Malaysia, Vietnam, and Thailand, in 2017-2020. Meanwhile, the analysis technique uses the Common Effect Model (CEM) approach. The final calculation results show that the US-China trade balance and import variables influenced ASEAN-4 economic conditions in 2017-2020.

Trade creation and export diversion: Thailand’s plastic and rubber under the ASEAN-China free trade agreement

This study aims to investigate the impact of the ASEAN-China free trade agreement on plastic and rubber trading, focusing on trade creation and export diversion. The collected data include 11 intra-bloc countries and 23 extra-bloc countries from 1990 to 2021, analyzed using STATA17. The gravity model is applied to the international trade framework. First, the unit root test is used to confirm the stationary nature of the data. Then, the methods are compared, employing fixed effects and a robust Poisson maximum likelihood estimator. The bilateral dummy variables are used to estimate the directional impact of trade agreements on export volume. The result demonstrates that the ASEAN-China free trade agreement establishes trade creation and export diversion. It has had a positive impact on the export value of plastic and rubber in Thailand over the past 30 years, but in terms of trade creation is less than export diversion. This means that exporting plastic and rubber to extra-bloc countries will gain more benefits than trading with member countries under the ASEAN-China free trade agreement. However, trading under the ASEAN-China free trade agreement may continue, but export volumes of plastic and rubber will decline. According to the findings, it can be suggested that Thailand’s government has to have a comparative advantage in product and strong competitiveness. Meanwhile, the ASEAN-China free trade agreement should not only focus on trade tariffs but also improve customs clearance to reduce trade costs. AcknowledgmentI would also like to extend my thanks to my parents for their support and encouragement throughout my studies.

The Ratification of Indonesia-Australia Comprehensive Economic Partnership Agreement: Investment Challenges and Opportunities

This article aims to conduct a more in-depth study of Indonesia's challenges and opportunities after the ratification of the 2020 Indonesia-Australia Comprehensive Economic Partnership Agreement, hereinafter referred to as IA-CEPA. IA-CEPA offers opportunities for investment, trade in goods and services, and human resource capacity building for both countries. The Indonesian government needs to accelerate the harmonization of national laws related to the substance of IA-CEPA so that no legal conflicts harm Indonesia's national and economic interests. This research applied normative or doctrinal research methods, collecting legal materials with literature studies, which were then analysed with descriptive analysis techniques to find solutions to the problems raised. The results show that IA-CEPA brings great opportunities for economic growth in both countries. With greater access to each other's markets and cuts in trade tariffs, this agreement can stimulate greater trade and investment. IA-CEPA provides incentives for both countries to diversify their investment sources. This can help reduce dependence on one particular country or region and increase economic resilience.

Indonesia's export comparative and competitiveness advantages in the 'emerging market' scheme during the pandemic

Relevance. The unprecedented disruptions caused by the COVID-19 pandemic had a profound impact on the global economy, including Indonesia. Despite the challenges, Indonesia successfully managed to navigate and recover its international economic activities. Analyzing how Indonesia navigated its export advantages during the COVID-19 pandemic is crucial for understanding its resilience in the global economy. Research objective. The study aims to analyze the comparative and competitiveness of Indonesian export products, particularly the food processing industry, under the scheme of emerging markets and developing economies during the COVID-19 pandemic. Data and methods. This study relies on the data from Badan Pusat Statistik (BPS) and the Indonesian Ministry of Trade, along with world export data from the World Bank, OECD, and the International Trade Center, to examine the food processing industry during the 2021-2022 pandemic. Using the Revealed Comparative Advantage (RCA) model, it classifies comparative products for potential exports and diversification guidance. The Export Product Dynamics (EPD) model measures competitive advantage and serves as an early warning indicator, providing a comprehensive trade analysis for identifying growth opportunities and mitigating risks. Results. The RCA findings indicate that Indonesian processed food products for emerging market countries exhibit strong comparatives, supported by factors such as selling prices, production capacity, innovative technology, and trade tariff policies. This is reinforced by the results of the EPD analysis, which shows the dominance or rising star status of these products. Conclusions. The dominance of processed Indonesian food products points to the need for the government to uphold and expand exports beyond emerging market countries. Recommended measures include initiating revitalization, transformation, market analysis, and evaluating products categorized as falling stars or experiencing failures, missed opportunities, and retreats. Additionally, a focus on the upstream-downstream sectors of the food processing industry is crucial.

Comparative Analysis of Super Nations’ Pre and Trade War Periods on Nigeria

There is no contention that the contemporary world has been reduced to a global village but of great concern is how policies that were made in other distant economies affect other places’ economy, politics, culture, education, etc. This study primarily investigated whether US-China trade war had any impact on their trade with Nigeria. This is because the US and China are Nigeria’s important trading partner and it is expected that whatever happened in these two leading world economies would have impacts on other countries. The period Q12014-Q42019 was adopted for the study because it allowed the researcher to compare the performance of the Nigeria’s trade with the two countries before trade war with the performance during the trade war period. The pre-trade war period adopted for this study was Q12014 to Q42016 while the trade war period was Q12017 to Q42019. The study used secondary data from Nigeria’s export and import trade with US and China. All the data were quarterly data and obtained from the website of National Bureau of Statistics (NBS) quarterly bulletin. The study was delimited to export and import trade between Nigeria and US-China because trade tariff policies have significant impact on imports and exports and the effect is strongest on trade. The paired-samples t-test techniques were used to analyse the data. The findings revealed that there was a significant difference in Nigeria’s trade flow with the US and China during the trade war periods when compared to the periods before the trade war.

Implications Increase of Protectionism Between USA and China for International Business

The main aim of this paper is presentation the implications increase of protectionism between the United States and China on international business. The main objective of the research task is to give a comprehensive analysis of current trends in foreign trade theory and policy and in particularly the models of foreign trade policy, trade interests indicated by export orientation and import sensitivity, protectionist pressures in different political system, the level of protectionist pressures, new tendencies in international business, reasons for the USA to implement tariff sanctions. China will be significantly hurt by tariff trade war in all indicators, including welfare, gross domestic product (GDP), manufacturing employment and trade. However, it is pointed out that although there will be definite impacts on China, the costs should be maintainable and will not severely damage the Chinese economy. In regard to the United States, the simulation produced results that described, the US will gain on welfare, GDP and non-manufacturing production, but hurt employment and trade.

How does US tariff policy affect the relationship among crude oil, the US dollar and metal markets?

This study aims to investigate two questions: a) what are the relationships among crude oil and metal markets with respect to fluctuations in the US dollar (USD) index? and b) have these relationships changed in response to the US trade tariff policies on aluminum and steel imports (on March 8, 2018)? The structural break test shows that after the institution of the import tariff policy, there was a significant change in the behavior of the aforementioned markets, especially in the metal markets. The spillover effects were measured using the vector autoregressive moving average asymmetric generalized conditional heteroskedasticity (VARMA-AGARCH) model along with the quantiles and frequencies methods. The analysis period being from April 1, 2016 to December 30, 2019. The findings revealed that there was a spillover effect from the USD index and crude oil market to the aluminum and steel markets. After the tariff policy, the negative spillover from the USD index into the aluminum and steel markets changed to positive, and its impact increased in the post-break period. Furthermore, the positive impacts of the crude oil price on aluminum and steel decreased after the tariff policy. According to the quantile regression results, metals could act as a safe haven and hedge against the USD index under different investment horizons (short-, mid-, and long-term) and market conditions (bearish, normal, bullish).

The impact of the customs environment on Vietnam’s exports

This paper aims to study the impact of the customs environment on Vietnam's exports, using panel data with 11 variables collected from 81 trading partners of Vietnam in the period between 2014 and 2019. The customs environment index (CEI) is determined by four component indexes: i) ease of cross-border trading, ii) prevalence of non-tariff barriers, iii) trade tariffs, and iv) corruption perception, with weights for each component calculated by the Analytic Hierarchy Process (AHP). The gravity model is employed and run using R software version 4.0.4. The results indicate that the customs environment has a significantly positive impact on Vietnam's exports at the level of 1%; each percentage improvement in the CEI will lead to a 1.8105% increase in Vietnam's exports (ceteris paribus). In other words, the convenience of the customs environment could promote Vietnam’s exports. By calculating the CEI of all countries, the results also show that the customs environment in Vietnam has improved during the investigated period, from 0.57 in 2014 to 0.59 in 2019, but this improvement is not considerable. When compared to Association of Southeast Asian Nations (ASEAN)-6 countries, Vietnam has a relatively modest customs environment record. These are critical findings for the implementation of necessary policies in Vietnam.