Trade Conflict Research Articles

Domestic and foreign cap-and-trade regulations, carbon tariffs, and product tariffs during international trade conflicts: A multiproduct cost-efficiency analysis

This paper develops a down-and-out call option model with structural breaks to examine the effects of domestic environmental policies on carbon-intensive firms amid international trade conflicts. The findings reveal that stricter cap-and-trade regulations, carbon tariffs, and product tariffs exacerbate pollutant-specific diseconomies of scale, limit economies of scope, and reduce firm equity. The positive impact on pollutant-specific diseconomies of scale leads to higher pollution, hindering progress toward Sustainable Development Goal 7 (SDG 7: Affordable and Clean Energy) from a multiproduct cost-efficiency perspective. Meanwhile, the negative impact on economies of scope results in fewer products and pollutants, aligning with SDG 7 but conflicting with Sustainable Development Goal 8 (SDG 8: Decent Work and Economic Growth), as the scope measure accounts for efficiency in both products and pollutants. Additionally, the negative impact on firm equity discourages progress toward both SDGs, especially during trade conflicts. In summary, environmental policies distinctly affect firm multiproduct cost efficiency and equity, particularly under varying trade conflict conditions.

Article: Redefining Global Trade: The Interplay of Geopolitics, Economic Resilience, and Sustainability?

This paper explores the shifting dynamics of global trade amid rising geopolitical tensions between the United States, the European Union, and China. It traces the evolution from post-World War II American-led globalization to hyperglobalization, where China emerged as a global manufacturing powerhouse. While hyperglobalization spurred economic growth and lowered consumer prices, it also led to job losses, income inequality, and environmental degradation in developed economies.The COVID-19 pandemic and the ongoing US-China trade conflict have accelerated a shift towards economic resilience and national security. The US has responded by decoupling from China, particularly in critical sectors like technology and clean energy, viewing economic policy as integral to national security. Meanwhile, the EU, though aligned with the US in geopolitical concerns, remains economically dependent on China and has adopted a more regulatory approach. The EU seeks to balance its economic ties with China by leveraging trade regulations, such as the Carbon Border Adjustment Mechanism (CBAM) and the Corporate Sustainability Reporting Directive (CSRD), to encourage Chinese investment while promoting higher environmental and social standards.The paper also examines the increasing influence of environmental policies on trade, noting how both the US and EU are integrating sustainability into their trade frameworks. However, this trend raises concerns about the potential for environmental regulations to become trade barriers, further complicating international relations.

Under double shadows: how U.S.–China trade relations and path dependence shape China's IP preliminary injunction system

ABSTRACT The current IP preliminary injunction system in China is an awkward mixture that has developed under two shadows: U.S.–China trade relations, and path dependence. This article traces the historical moments when China amended its rules on IP preliminary injunctions. It finds that, while U.S.–China trade relations facilitated the transplantation of equitable standards into the regime, the basic procedural framework, rooted in the civil law tradition, remains largely intact. These double shadows have introduced pressing problems into the system. However, most of these issues can be attributed to China's retention of its basic procedural framework, which is shared with and originates from the property preservation system. Path dependence theory aptly explains this developmental trajectory and offers normative guidance for future reforms. It may not be feasible to conduct a full cost–benefit analysis on establishing a standalone framework for IP preliminary injunctions in China, which would represent a radical alteration of the system. However, the developmental-evolution model of path dependence theory can still provide valuable insights, even if the system currently exhibits a semi-strong form of path dependence. Chinese legislators could design future incremental reforms with path evolution in mind, aiming for a gradual recombination that ultimately pulls the IP preliminary injunction system out of its original procedural framework. Once sufficient incremental reforms have accumulated, decision-makers can seize critical junctures (such as future escalations in U.S.–China trade conflicts) as opportunities to establish a new, standalone framework for IP preliminary injunctions, thereby breaking the lock-in loop.

Differential Economic Impacts of Chinese and American Trade Policies on Developed Versus Developing Nations

The trade conflict between the United States and China, the two largest economies in the world, has considerable implications for global economic stability and growth. This topic has been selected due to the necessity of understanding how these trade disputes impact other countries, particularly those heavily dependent on exporting goods to these major economies. The analysis aims to investigate the varied effects of the trade war on both industrialized and developing nations. An analysis is conducted to examine the differential effects of the trade war on industrialized and developing nations by studying the changes in GDP growth rates, unemployment rates, and balance of trade trends. This study examines the distinct economic effects of the China-US trade war on Germany, Canada, and Mexico, which serve as representative examples of developed and developing nations. The results emphasize the significance of customized policy measures to tackle the distinct difficulties and prospects encountered by various economies. Developed countries should prioritize efforts to reduce sluggish economic development and address unemployment in specific sectors. On the other hand, developing nations should take advantage of trade diversion benefits and strengthen their economic resilience. This study enhances the awareness of global trade dynamics and offers vital perspectives for policymakers seeking to negotiate the intricacies of international trade wars.

Tracing the propagation of disruptions in supply chain scenarios: A case study of photovoltaics diversification

Diversifying supply chains through reshoring and friendshoring is increasingly proposed as a key strategy for supply security and resilience. Quantitative analyses characterizing to what extend diversification shield countries from supply disruptions remain however scarce. In this paper, we present a methodology to assess the supply risk exposure of countries in different supply diversification scenarios – business-as-usual, reshoring, friendshoring. For each scenario, the propagation of three types of upstream disruptions – supply shortage, export restriction, bilateral trade conflict – is simulated. A fragility ratio metric is introduced to quantify the potential downstream shortages caused by these disruptions. A novel friendshoring modelling approach is also proposed. It consists in determining risk-optimized trade relations based on criteria such as supply concentration and UN voting similarity.The Python-based model is tested on the case of diversified photovoltaics supply chains, e.g., if the US, EU, and India increase domestic production from polysilicon to module. Beyond building up manufacturing capacities, choosing between vertical integration and trade is highly determinant in risk exposure. Each diversification scenario shows pros and cons depending on the country and process considered.Overall, this paper underlines the need for supply risk research to nuance diversification recommendations. It would be particularly helpful to improve indicators accounting for a region's technical and economic ability to supply a given product, and to realistically model the challenges of reshoring.

U.S.-China Trade War: Analysis Of The Semiconductor Industry

This research paper analyses the causes and outcomes of the U.S.-China trade conflict through the lens of the semiconductor industry. It explores strategic measures the U.S. took to curb China’s technological progress. Furthermore, the paper looks at China’s countermeasures to mitigate the repercussions of U.S. policies. This research paper is a literature review of various research papers to unveil the causes and effects of the trade war, in the semiconductor industry. Some of the leading causes include intellectual property disputes(Huawei and ZTE) and trade relations, the outcomes of the trade war are more directed toward economic competition and global impact. The paper proposes potential policies to mitigate the damages caused by the trade war and recommends policies to create a robust economic environment. The paper explores policies that could enhance diplomatic relations and minimize trade wars. Methodology The research methodology used in this paper is a Literature review. The five main papers reviewed are... 1. “What the Huawei Case Can Teach Us about the U.S.-ChinaPower Game” by Lu Chuanying and Nicolas Huppenbauer. 2. “The U.S.-China Trade War: Is Malaysia benefiting from "Diversions" in US import demand?” by Calvin Cheng, Firdaos Rosli, and Dwintha Maya Kartika. 3. “Economic Security: Uncertainty Rises as U.S.-China Strategic Competition Deepens” by Yeon Wonho. 4. “U.S.-China Bilateral Economic Relations” by Amy P. Celico and Song Guoyou. 5. “The India-China-U.S. Triangle” by Vijay Gokhale. These research papers are analyzed to highlight some of the chief factors in the semiconductor industry that led to the trade war, as well as investigate papers to comprehend the outcomes of the trade war on the semiconductor industry

Leveraging friendshoring in response to sanctions: Essential insights for global managers

In the world that has become increasingly hostile and politicized, the use of sanctions has emerged as an often-used tool for enforcing global rules. Nevertheless, organizations engaged in international trade have found ways to circumvent imposed sanctions and deliver goods and services to the sanctioned markets through a variety of means including offshoring, nearshoring, and, most importantly, friendshoring. There has been a notable increase in these shoring phenomena, especially in the context of global disruptions, including the COVID-19 pandemic, the United States and China trade conflicts, and sanctions related to the Russia-Ukraine war. This study offers a rich account of how organizations overcome economic sanctions that lead to restrictions in trade among trading partners. After unique in-depth interviews with representatives from 44 organizations involved in trade in nine imposing, intermediary, and targeted countries, we synthesized six main friendshoring models often used in instances where sanctions are imposed. We end by offering prescriptive guidance for managers whose companies face difficult shoring decisions because of sanctions.

Österreichs Industrie im Wandel: Wettbewerbsfähigkeit und Wertschöpfung unter Druck

Abstract Austria's industry is under great pressure. Global competition has intensified in recent years, along with international trade conflicts and tensions between the major economic blocs. At the same time, industrial value creation in Austria is suffering from high labor and energy costs as well as increasing bureaucracy and tighter regulatory requirements. In January 2024, Deloitte conducted a survey among more than 500 WKO member companies from all trade associations in the industrial sector to identify the most important challenges facing Austria's industry.

한국의 대외 수출에 미치는 TBT와 미통보 기술 규제의 영향분석: 중력모형과 PPML 방법론을 통한 접근

This study investigates the impact of Technical Barriers to Trade (TBT) and unnotified technologies on South Korea’s foreign exports, analyzing the background and objectives. With the expansion of regional economic blocks such as FTAs, the EU, and NAFTA, the scope of non-tariff barriers, including TBT and Sanitary and Phytosanitary (SPS) measures, has broadened. These non-tariff barriers, often implemented for safety purposes like environmental protection, can increase shipping and compliance costs, imposing a burden on domestic industries. The main objective of this study is to quantitatively evaluate the effects of TBT and unnotified technologies on South Korea's exports across various industries from 1995 to 2022. To achieve this, we employ the gravity model, one of the most widely used models in explaining trade conflicts, alongside the Poisson Pseudo Maximum Likelihood (PPML) method, which is suitable for handling the complexities of trade data with zero trade flows. This approach enables a detailed analysis of the impact of TBT and unnotified technologies on export performance, disaggregated by objective and industry. The results reveal that while TBT has a positive effect in promoting exports, unnotified technologies have a negative impact. These findings highlight the importance of distinguishing between the two in international trade negotiations.

Retaliatory Tariffs of China during the Trade War: A Firm-level Overview

Abstract In this paper, we offer a comprehensive survey of the latest research regarding the pass-through of tariffs during the trade war between China and the United States, with an emphasis on the investigations conducted from the Chinese perspective. While one might anticipate symmetric effects on both the United States and China, these nations exhibit substantial disparities in terms of trade structure and policy. We underscore two salient concerns that have been largely neglected in extant literature: (1) the exemption of processing imports from retaliatory tariffs in China, which may engender biased estimations of pass-through at the product level, and (2) the heterogeneous distribution of retaliatory tariffs across product classifications, firm ownership structures, and geographical regions, necessitating more granular estimations at the firm level. Furthermore, we provide a detailed description of firm import tariffs, emphasizing the crucial role of tailored policies in mitigating the repercussions of the trade conflict.

Research on interregional oil cooperation-sanctions with evolutionary game

PurposeThe game strategies differ when different regions participate in the oil game. Under what circumstances will different participants choose cooperation or sanction strategies? This is the core issue of this paper.Design/methodology/approachRegarding the current and future game behavior between different regions in the oil trade, this paper constructs an evolutionary game model between two regions to explore the possibility of sanctions strategies between the two sides in different situations.FindingsThe research finds: (1) When the benefits of in-depth cooperation between the two regions are greater, both sides tend to adopt cooperative strategies. (2) When the trade conflict losses between the two regions are smaller, both sides adopt sanctions strategies. (3) When a strong region trades with a weak region, if the former adopts a sanctions strategy, the net profits are greater than the benefits of in-depth cooperation between the two regions. If the latter adopts a sanctions strategy, the net profits are less than the trade conflict losses between the two regions. There will be the strong region adopting a sanctions strategy and the weak region adopting a non-sanctions strategy. At this time, the latter should reasonably balance the immediate and future interests and give up some current interests in exchange for in-depth cooperation between the two regions. Otherwise, it will fall into the situation of unilateral sanctions by the strong against the weak.Originality/valueThere is no paper in the existing literature that uses the evolutionary game method to analyze the oil game problem between the two regions. This paper constructs a two-party evolutionary game model composed of crude oil importers and crude oil exporters and, based on this, analyzes the evolutionary stability between the two regions under sanctions and cooperation strategies, which enriches the energy research field.

Measuring systemic risk in Asian foreign exchange markets

This paper measures systemic risk in eight Asian foreign exchange markets between 2015 and 2021. We define systemic risk as the risk of significant devaluation in a large number of currencies. Our measures, derived using a time-varying factor copula model, can take into account heterogeneous and dynamic dependencies among markets. Our empirical findings reveal that (1) systemic risk spiked during the US-China trade conflict and the COVID-19 pandemic; (2) Among the currencies studied, the Japanese yen contributes most to systemic risk, while it is the least vulnerable to systemic shocks; (3) Higher levels of regional trade and financial integration increase a currency's vulnerability to systemic risk in the Asian foreign exchange markets.

Influence of Geopolitical Events on Procurement Strategies and Supply Chain Dynamics in Multinational Corporations

Purpose: The aim of the study was to examine the influence of geopolitical events on procurement strategies and supply chain dynamics in multinational corporations Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study found that geopolitical events exert a profound influence on procurement strategies and supply chain dynamics within multinational corporations (MNCs), compelling them to adapt swiftly to global uncertainties. The study underscored that events such as trade conflicts, sanctions, and political instability disrupt established supply chains, necessitating strategic adjustments in sourcing, supplier relationships, and operational practices. MNCs respond by diversifying sourcing locations, enhancing supply chain transparency, and integrating robust risk management frameworks to mitigate geopolitical risks effectively. Unique Contribution to Theory, Practice and Policy: Institutional Theory, Resource Dependence Theory & Transaction Cost Economics (TCE) may be used to anchor future studies on influence of geopolitical events on procurement strategies and supply chain dynamics in multinational corporations. Encourage MNCs to adopt agile procurement strategies that prioritize flexibility and responsiveness to geopolitical disruptions. This includes establishing multi-sourcing strategies, leveraging local suppliers, and implementing digital platforms for real-time risk monitoring and decision-making. Strengthen supplier relationship management practices to build resilient supply networks. Foster transparent communication and collaboration with suppliers to co-develop contingency plans and mitigate supply chain risks arising from geopolitical events. Advocate for transparent and stable trade policies that reduce uncertainty and facilitate global supply chain operations. Engage in constructive dialogues with policymakers to address trade barriers, tariffs, and regulatory inconsistencies that hinder cross-border trade and procurement efficiency.

The Economic Role of Technology in International Trade: Theory and Practice in the Trade War

Scientific purpose. The aim of the article is to analyze the impact of technological changes and restrictions on the freedom of technology transfer in the contemporary world economy on international trade in the context of the trade conflict between the United States and China. Research process and methods. Interrelationships between the role of technological changes and trade, the issue of monopoly rent resulting from the technological advantage of some countries, were examined on the basis of the theory of international trade (Ricardian model, Heckscher-Ohlin) and subsequent theories, in particular the approach of Posner, Krugman, Melitz. To analyze the problem of technology transfer limitations in the modern world economy, mainly due to China's trade practices, a quantitative and qualitative method was used as well as a review of statistics of international trade in high-tech goods. Foreign direct investment in China was conditioned by the transfer of knowledge and advanced technologies from the United States. Scientific analysis results. Technological changes and the spread of technology as a result of the intensification of international trade are associated with a specific impact on the benefits and losses for the state with a technological advantage as a result of the phenomenon of "learning by doing". To examine the economic effects of the growing importance of technology in international trade, the theoretical and empirical approach to analyzing the demand in selected countries, including the United States, European Union countries, Japan and China, for the level of employment and wages of highly qualified labor force was used. Conclusions, innovations, recommendations. Further research should cover issues related to the influence of states on supporting the development of advanced technologies, which is associated with specific dilemmas regarding the shaping of international trade flows and the impact on the level of wages in the economy.

Export Instability, Investment, Export Growth and Economic Growth in India

The “Export-led Growth Hypothesis,” as it is known in the literature, is still a popular issue in both theoretical and empirical research. According to the export-led growth hypothesis (ELGH), a key factor in determining growth is the expansion of exports. It asserts that growing capital and labour inputs into the economy as well as exports can contribute to a country’s overall growth. The association between economic development, export growth, export fluctuation, and real effective exchange rate (REER) in India from 2001 to 2021 is examined in this paper using a multiple linear regression analysis model. Additionally, the impacts of foreign exchange, export fluctuation on investment, and import of capital goods have also been studied. The autocorrelation is also tested using the Durbin-Watson (D-W) test. Investigation of the association between income growth and exports in the context of India reveals that the country’s exports haven’t increased significantly enough to prove the theory of export-led growth. For instance, ceteris paribus, one per cent change in exports over time is expected to result in a 0.007 per cent increase in GDP. Weaker global demand, inflation, dropping exports, and growing global trade conflict all contribute to a weaker-than-expected positive link between GDP and exports. However, the findings have also shown that one per cent rise in instability increases GDP by 5.04 per cent. Furthermore, research has indicated that export instability does contribute to import for capital goods and demonstrates the relationship between investment and export instability is positive but not statistically significant. The result for policy is that, in order to decrease the negative impacts of export fluctuations, India should concentrate on those goods in which it has a competitive edge. The primary factors of the excessive volatility and restricted growth must be fully investigated in order to mitigate instability, and inherent flaws must be addressed.

U.S.–China trade conflicts and R&D investment: evidence from the BIS entity lists

The economic outcomes of U.S.–China trade conflicts on Chinese enterprises remain ambiguous. Using the staggered export control lists released by the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce in conjunction with data from Chinese publicly listed manufacturing firms, we identify Chinese entities subjected to these export controls. Our Difference-in-Differences (DID) estimates show that export restrictions induced by the entity lists enhance the R&D investment intensity among Chinese firms by 16.58% in the next year. The mechanism is that controls increase firms’ R&D investment through government subsidies, firms’ inventory adjustment and firms’ risk-taking. Heterogeneity tests show that the policy effect is more significant for State-owned enterprises (SOEs), firms with executives with foreign experience. In addition, the R&D promotion of firms supported by China’s industrial policy is more pronounced. Although controls significantly increase R&D inputs, they have little or negative effect on firms’ innovation outputs. Our study provides micro-level causal evidence on the economic impacts of the U.S.–China trade war.

Bibliometric analysis and literature review on maritime transport resilience and its associated impacts on trade

ABSTRACT This paper presents a comprehensive bibliometric analysis and literature review on maritime transport resilience and its impact on international trade. It categorizes and benchmarks risks affecting maritime transport resilience, including climate change, geopolitical conflicts, and public health events. Previous research focuses on climate change-related risks, primarily sea-level rise and storms, evolving from qualitative to quantitative methods. Research on public health events, especially pandemics, has emerged, highlighting global supply chain resilience and maritime transport. However, more comprehensive economic evaluations utilizing analytical models and simulations are needed to assess costs and benefits of adaptation strategies. Limited research exists on geopolitical risks and their impact on maritime transport resilience and international trade, with fragmented studies lacking attention in this critical research direction. Recent conflicts like the Sino-US trade conflict, Russia-Ukraine war, and Israeli-Palestinian conflict have profoundly affected maritime transport resilience, international trade, and the global economy. Future studies should prioritize economic implications of maritime transport resilience, particularly regarding geopolitical risks. In-depth economic evaluations, analytical modeling, and numerical simulations are necessary to inform policymakers and industry practitioners for enhancing resilience in the maritime shipping sector. The study offers valuable insights, guiding further investigations and contributing to the development of a robust global supply chain.

Correction to “Agricultural exports and retaliatory trade actions: An empirical assessment of the 2018/2019 trade conflict”

Correction to “Agricultural exports and retaliatory trade actions: An empirical assessment of the 2018/2019 trade conflict”

Assessing sustainable future of import-independent domestic soybean production in China: policy implications and projections for 2030

Soybean production, integral to sustainable agriculture and reliant on imports, faces vulnerability to international risk factors impacting domestic food security. The 2021 Central Rural Work Conference advocated strategic adjustments for sustainable soybean production amidst resource constraints, trade conflicts, and the lingering impact of COVID-19. This study scrutinizes the developmental framework of China’s soybean industry within current domestic policies. This paper uses the soybean sown area and soybean production in each province of China from 1995 to 2020 to measure China’s soybean concentration, production layout, and comparative advantage of regional scale, to analyze in depth the overall situation of China’s soybean production as well as the differences between regions, and to pave the way for the subsequent soybean production forecast. Further, taking the domestic soybean supply and demand situation in China in 2020 as the base period, while considering the growth values of soybean production under different scenarios, the potential forecasting model is utilized to estimate China’s soybean production under different scenarios. The results show that, in terms of inter-annual variability, revealing an upward trajectory from 1995 to 2020, with a shift to major soybean producing areas, notably in the northeast and the Huanghe-Huaihe-Haihe area. From inter-provincial changes, Soybean production on the left and right sides of the “Hu-Huanyong line” has significant heterogeneity; specifically, east of the “Hu-Huanyong line,” soybean production advantages are more obvious. Additionally, the study considered the actual planting situation of soybeans and envisaged two scenarios of compound planting and strip planting. The soybean production range in 2030 is expected to be 20.73–22.32 million tons and 21.15–27.55 million tons, with self-sufficiency rates varying from 18.57 to 19.98% and 18.95 to 24.68%, respectively. The research aims to provide a comprehensive understanding of China’s soybean industry and its potential trajectories, employing a model combining historical trends, policy analysis, and technological advancements. Results suggest a promising future with strategic adjustments in planting structures. Recommendations emphasize policymakers’ prioritization of technological investments and sustainable planting practices to achieve projected production targets. Policy interventions must address challenges tied to resource limitations, trade conflicts, and the ongoing COVID-19 effects, ensuring soybean industry resilience.

Interactive cue matters: The moderation role of situational factors in the effects of user comments on news sharing

Communicators often find it challenging to prioritize the public and manage their comments during risk communication. This study explored the effects of comments as interactivity cues on news diffusion while considering situational factors under the framework of the Situational Theory of Problem Solving in the context of the US-China trade conflict. For this purpose, the researchers conducted an experiment to investigate the effects of interactivity cues and public segmentations on news sharing. The findings suggest that comments elicit different news-sharing behaviors among different segments of the public. The aware public shares more news than the activists/active public who are more likely to share when exposed to news posts with disabled comments than those with enabled comments. The results regarding the different segments of the public suggest the absence of the latent public in hot issues. Furthermore, the results suggest that message attributes have a limited effect on individuals’ information-processing behavior unless considering situational factors. The theoretical contributions and practical implications for communicators are further discussed.