US-China Trade War Research Articles

Review on pharmaceutical supply chain resilience: strategies for managing disruptions and ensuring continuity

The pharmaceutical supply chain is critical to ensuring the availability of life-saving medications and healthcare products. However, it is highly vulnerable to disruptions, including natural disasters, economic and political instabilities, supply chain vulnerabilities, and technological failures. This review explores strategies for enhancing resilience within the pharmaceutical supply chain, focusing on risk management, supplier diversification, inventory management, and the integration of advanced technologies such as IoT, AI, and block chain. Case studies, including the impact of the COVID-19 pandemic, natural disasters like Hurricane Maria, and geopolitical challenges like the US-China trade war, are analyzed to extract valuable lessons and strategies that proved effective in maintaining supply chain continuity. The review also looks ahead to future trends, emphasizing the importance of digital transformation, sustainability, and ethical sourcing in building a more robust and adaptable pharmaceutical supply chain. The findings underscore the need for proactive disruption management, strategic diversification, and sustainable practices to ensure the uninterrupted delivery of essential healthcare products.

Outward direct investment as a shelter from external trade policy shocks: Firm‐level investigation of the US–China trade war

AbstractThis study examines the effects of external trade policy shock from the US–China trade war on firm value. Using a merged data set of Chinese‐listed companies, our empirical results reveal that Chinese firms conducting outward direct investment in the US have significantly higher stock returns around the date of the outbreak of the trade war as compared with the lower returns of exporting firms. This indicates a sheltering effect of pre‐existing outward direct investment activities. Moreover, we find that the sheltering effect is more pronounced for production‐oriented projects, high tech industries and tariff‐targeted sectors, while it is weaker for state‐owned companies.

Can Trade Policy Uncertainty Drive Green Innovation? Empirical Evidence From the US–China Trade War

ABSTRACTChina's rapid economic growth in recent years has coincided with heightened environmental regulations and an upsurge in greenhouse gas emissions, necessitating a greater emphasis on green innovation to mitigate environmental risks. Concurrently, the US–China trade war has elevated trade policy uncertainty (TPU). This study uses the TPU surge from the trade war as a quasi‐natural experiment, employing text analysis of annual reports to assess firms' TPU perceptions. Using a difference‐in‐differences method, we find that increased TPU significantly hinders green innovation. Firms' responses vary with environmental advantages, regulation levels, and government subsidies. Mechanisms include reduced environmental investment, decreased executive attention to environmental issues, and corporate social responsibility. These findings underscore the importance of a stable trading environment for promoting green innovation.

Besides tit for tat: The effect of US 301 tariffs on Chinese local government spending

Many studies have shown that the US-China trade war has harmed China's exports and economy. This paper analyzes whether local governments respond to US 301 tariffs through public spending. Using the variation of tariff exposure across cities, this paper finds that the tariff shock led local governments to increase public spending, mainly on social security and employment. Heterogeneity analysis indicates this effect was more pronounced in cities with higher openness, lower fiscal pressure, and lower saving levels. Robustness tests are provided.

The Impact of the Trade War Between China and the U.S. on the Economy of Indonesia

China-US Trade War is an International Trade situation where two of the most powerful economic country increasing their tariff for trading goods to each other. The War itself actually occur for a long time but not as escalated as of 2018 which was started by the US itself and its current President, Donald Trump. Many people concern that this war may affect the world economy development since both of the countries are being the source of trading for many countries. This paper will discuss about how The China-US Trade War can influence Indonesia Economics which will bring either opportunity or problem. Research in this paper discusses about Indonesian Economy ranging from exports, imports, exchange rates and FDI which may be affected by Trade War using Correlation Test as research methods.

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.

Spillover between investor sentiment and volatility: The role of social media

We examine the spillover effects between social media sentiments and market-implied volatilities among stock, bond, foreign exchange, and commodity markets. We find that information mainly spillovers from volatility to sentiment indices, with the VIX being the most significant net transmitter. Within each asset class, there is a more pronounced spillover from volatility to sentiment compared to the reverse, implying that a significant portion of investor sentiment is volatility-driven. This relationship intensifies in turbulent economic periods, such as during the Global Financial Crisis, Brexit, the US-China trade war, and the COVID-19 pandemic. Our analysis also reveals that sentiment indices can transition from net receivers to net transmitters of shocks during turbulent periods. This can be explained by the echo chamber effect, where social media echo prevailing news signals, and some investors interpret repeated signals as genuinely new information.

Connectedness and Shock Propagation in South African Equity Sectors during Extreme Market Conditions

This study examined the connectedness and propagation of risk in the South African equity sectors during the Global Financial Crisis (GFC), the European Debt Crisis (EDC), the US–China trade war, and the COVID-19 pandemic. Daily returns of nine Johannesburg Stock Exchange (JSE) super sectors were examined from 3 January 2006 to 31 December 2021. Applying the connectedness matrix and time-varying parameter vector autoregressive (TVP-VAR) model, in full sample and sub-periods, the study showed that dynamic total connectedness of the super sectors is high in absolute form (62%). Furthermore, it was found that the highest volatility connectedness was during the EDC (68.83%) and during the COVID-19 pandemic (68.57%), followed by the GFC (63.16%) and lastly the US–China trade war (42.09%), respectively. This suggests that the tendency for a systemic risk is highest during the EDC, COVID-19, and GFC periods, and lowest during the US–China trade war. The financial sector was the primary net-transmitter of shocks during the COVID-19 period, while the automobile and parts sector was the strongest net-transmitter of shocks during the GFC, EDC, and US–China trade war. Similarly, the strongest net recipient of shocks during GFC, EDC, and COVID-19 is the chemical super sector. The study concludes that there is a significant volatility connectedness among JSE super sectors. In addition, the JSE super sectors exhibit time-varying connectedness during extreme events. Moreover, the net-transmitter and net-receiver of shock do not change significantly during different crisis periods. The policy implications of the findings are highlighted in the concluding section.

Understanding the post-covid Chinese economy

ABSTRACT The underperformance of the post-COVID Chinese economy in 2023 has attracted worldwide attention. By examining various indicators, this study confirms the conclusions observed by other researchers. This study offers a declining confidence approach to explain this underperformance. Based on the Baidu Index during January 2015 – January 2024, this study creatively constructs a Chinese confidence index and places the post-COVID Chinese economy into context. Trend data indicate that the Chinese confidence level was rising during 2015–2017 but began to decline persistently since 2018. This study then reviews a series of China’s foreign and domestic policies during this period, including the China-US trade war, supply-side structural reform, policies towards privately-owned enterprises, zero COVID policy, and national security policy, and concludes that they may have driven the rise and fall of Chinese confidence levels.

Partisanship in the Trump Trade War: Evidence from County-Level Crop Planting Data

Abstracts In 2018, the US–China trade war drove down the price of many US agricultural goods. While many farmers responded by planting alternative crops instead, others continued planting the low-value crops, with a high cost to their bottom line and resulting in a large number of agricultural bankruptcies. Why did some farmers disregard their own economic interests and plant low-value crops during the trade war? We argue that political preferences partially explain farmer behavior. Matching geo-referenced crop data to product-level sanctions lists from China, we calculate county-level changes in the planting of crops affected by the tariffs. We find that counties with a higher Trump vote share in the 2016 election were significantly less likely to change planting decisions due to the trade war. This suggests that partisanship may affect the economy more broadly than previously realized.

Design and analysis of government subsidies policy of capacity expansion under reselling and agency selling schemes

Major disruptions, such as the coronavirus disease of 2019 (COVID-19) pandemic and the US-China trade war, have significantly impacted businesses and the global economy, creating a turbulent environment for society and supply chains. Globally, fighting disruptions and ensuring the supply of essential goods has become a significant challenge for governments. One possible solution is to strategically expand essential product capacity to increase supply resilience. Governments must cooperate closely with suppliers through carefully designed subsidy policies. A theoretical model based on current industry practices was built to explore and analyze the partnerships between governments and essential product suppliers. Our proposed model includes four players: the government, the supplier, the selling agent, and the consumer. We considered government subsidy policies for capacity expansion in building supply chains subject to two pricing designs: (1) government pricing and (2) market pricing. The results indicate that once a disruption occurs, social welfare increases with the government-subsidized expansion of essential goods to increase supply chain capacity. We analytically show that if the government does not support production expansion, the supplier can expand production only if the expansion cost is trivial. Furthermore, without government pricing, the product price increases in the government subsidy ratio. Hence, we conclude that government intervention is required to stabilize the market with proper price control, especially in the essential goods supply chain.

The Shock of US-China trade war and the job Market: Downstream shrinkage and upstream employment

Using the 2018 US-China trade war as a quasi-natural experiment, we investigate how downstream shrinkage affects upstream employment. Utilizing a difference-in-differences (DID) approach, we reveal a negative effect of downstream shrinkage on upstream firm employment. Our mechanism analysis indicates that trade wars increase the tax burden, inventories, and accounts payable for downstream firms while reducing their employment. This shrinkage of downstream firms limits the scale of investment and operations for upstream firms through supply chain transmission, thereby decreasing employment of upstream firms. Moreover, our finding is more pronounced for specific types of firms, such as non-state-owned firms, firms operating across multiple industries. Our study provides an essential reference for firms in building resilient supply chain networks to better cope with potential negative shocks.

The impact of the US-China trade war on Vietnamese exports to the US: a quantitative study using DiD approach

Purpose The study attempts to examine the impact of the US-China trade war on Vietnamese exports to the United States, which has consistently served as a key market for Vietnamese goods and services in recent decades. The heterogeneous effects of the trade war on different export sectors are also evaluated.Design/methodology/approach The secondary data on Vietnamese exports to the US at a 6-digit level is collected from UN Comtrade. Besides, the difference-in-differences (DiD) method is employed to analyze the impact of the trade war on exports from Vietnam to the United States.Findings The findings revealed a 14% increase in total Vietnamese exports to the United States due to the trade war. Examining heterogeneous effects, certain industries, such as plastics, iron or steel articles, textiles and garments, and machinery and mechanical appliances, experience significant benefits. However, the study did not identify statistically significant effects on other sectors, such as electrical machinery products, agricultural and forestry, and furniture.Originality/value The paper is one among limited studies considering the causal effects of the trade war on a developing country, accounting for the heterogeneous effects on different export sectors.

Sino-Africa Relations Post-Covid-19: Issues for Consideration

Sino-Africa relations have been periodised into three phases. The first phase (1950s–1970s) includes the establishment of the People’s Republic of China (PRC) in 1949 and the decolonisation of African states. The second phase (1971–1990s) includes the drift of Sino-Soviet relations, the admission of China into the United Nations Security Council (UNSC), as well as the end of the Cold War. The third phase (2000s–2020) covers the inclusion of China into the World Trade Organisation (WTO) in 2001, as well as the establishment of the Forum on China-Africa Cooperation (FOCAC) in 2010. This article considers the fourth phase of Sino-Africa relations, argued to have begun in 2020 post-Covid-19, taking place at a time of de-globalisation, the ongoing Russia-Ukraine war and the US-China trade war. We assert that the latter changing global dynamics must be considered in making sense of Sino-Africa relations today. The article argues that despite such a changing global political order, there have been continuities and changes in China’s relations with the African continent. This is evident in the tightening of its relations with Africa, irrespective of ongoing dynamics in global affairs. Despite concerns about the USA’s reprioritisation of Africa, the establishment of the African Continental Free Trade Area (AfCFTA), China’s Belt and Road Initiative (BRI), vaccine diplomacy, and China and African States’ “neutrality” stance on various ongoing conflicts, it is safe to say that Sino-Africa relations will triumph even in this new phase.

Research on Efficiency and Multifractality of Gold Market under Major Events

(1) Background: As a safe-haven asset, gold attracts a large number of investors during major events. Uncertainties caused by global economic and market conditions lead to increased purchases of gold by investors, which in turn affects the efficiency of the gold market. (2) Methods: This article focuses on Shanghai gold and explores the potential impacts of different major events on the effectiveness and risk of China’s gold market using the Multifractal Detrended Fluctuation Analysis (MFDFA) method. (3) Results: the Chinese gold spot market is anti-persistence and exhibits significant multifractal characteristics, suggesting that the gold spot market possesses predictability and has significant volatility and high risk. Furthermore, the study conducts stage analysis based on different major events, and the results are as follows. The empirical results show that the gold market exhibits anti-persistence and multifractality features for three major events, i.e., the US–China trade war, the COVID-19 pandemic, and the Russia–Ukraine War. (4) Conclusions: for the COVID-19 pandemic, the intensity of anti-persistence is the highest. In addition, it is also found that the stronger the anti-persistence in the gold markets under a given event, the greater the corresponding risk. Finally, the article provides relevant decision-making suggestions for investors and risk managers.

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)

R&D Investment During a Crisis: Chinese Listed Firms in the US–China Trade War

R&D Investment During a Crisis: Chinese Listed Firms in the US–China Trade War

Risk connectedness between international oil and stock markets during the COVID-19 pandemic and the Russia-Ukraine conflict: Fresh evidence from the higher-order moments

Quantifying the connectedness across the oil and stock markets is vital for global asset allocation, systemic risk regulation, and prudent policy making. However, existing studies are mostly confined to return (first moment) and volatility (second moment) levels. This paper integrates the GARCHSK model with the TVP-VAR extended joint connectedness approach to examine higher-order moment risk connectedness between international oil and stock markets in both G7 and BRICS countries, thereby encompassing a wide range of global markets. This paper also discusses the impacts of geopolitical risks, acts, and threats on the total spillovers of volatility and higher-order moments based on the wavelet coherence method. Empirical results demonstrate that the risk spillovers between oil and stock markets are moment-dependent with the total kurtosis spillovers being stronger than the volatility and skewness spillovers. WTI, Brent, INE oil futures, and the Chinese and Japanese stock markets are consistent net receivers of spillovers whereas the remaining G7 stock markets are net transmitters. G7 and the Russian stock markets transmit significant net spillovers of higher-order moments to oil futures. The dynamic spillovers of volatility, skewness, and kurtosis are all time-varying and highly sensitive to the outbreak of major crisis events, especially the China-US trade war, the COVID-19 outbreak, and the Russia-Ukraine conflict. Driving factor analysis shows that the impacts of geopolitical risks, acts, and threats on total spillovers vary over time and across various frequency bands. Geopolitical risks strongly impact the total skewness spillovers during the crisis periods. Geopolitical acts exert a stronger influence on total kurtosis spillovers than geopolitical risks or threats. These findings can offer practical implications for cross-market investors, portfolio managers, market regulators, and policymakers.

US–China Trade War: an empirical evaluation regarding its impacts on Brazilian exports

US–China Trade War: an empirical evaluation regarding its impacts on Brazilian exports

Renewable Energy, Economic Policy Uncertainty and Climate Policy Uncertainty: New Evidence for Environmental Kuznets Curve from Emerging and Developed Countries

Recent events, such as the financial crisis, oil price shocks or fluctuations, Brexit, the US–China trade war, the COVID-19 pandemic, the Russia–Ukraine conflict and the subsequent energy crisis, have surged global economic policy uncertainty. As climate change has recently been more pronounced around the globe, discussions about climate policies and related uncertainties have also become a major concern. This study investigates the role of economic policy uncertainty (EPU) and climate policy uncertainty (CPU) on climate change (environmental degradation) for selected emerging and developed economies, expanding the IPAT framework and merging it with the Environmental Kuznets Curve (EKC) hypothesis. The IPAT framework examines the impact (I) of population (P), affluence (A), and technology (T) on the environment, whereas the EKC hypothesis proposes an inverted U-shaped curve between affluence and environmental degradation. Two models were created and tested for emerging and developed countries, namely Model 1 with EPU and Model 2 with CPU. A Pooled Mean Group (PMG) estimator is employed to investigate the interrelation between carbon dioxide (CO2) emissions and selected variables; namely the real Gross Domestic Product (GDP) per capita, squared real GDP per capita, renewable share in consumption, the EPU, the CPU and population. Test results indicate that the EKC hypothesis is verified only in Model 1 and for emerging countries, whereas population escalates climate change in both country groups. Furthermore, in line with the consumption effect theorized earlier in the literature, EPU is negatively related to carbon emissions in emerging countries. Thus, the EPU leads to a decrease in the use of energy and pollution-intensive commodities and mitigates climate change in EMEs. Compatible with our ex-ante expectations, renewable energy consumption alleviates climate change in both country groups in the short term. In Model 2, with CPU, we find no evidence supporting the EKC hypothesis for any country groups. However, we reaffirm that renewable energy consumption decreases CO2 emissions in developed countries, which is in support of the argument that energy transition holds the key to tackling climate change. Finally, CPU is associated with a decrease in CO2 emissions in emerging countries in the short term, potentially leading to a reduction in overall economic activity and alleviating climate change. This might also be attributable to the fact that the decisions of economic agents substantially rely on current and future policy (both economic and climate) expectations. Overall, verifying the EKC hypothesis for emerging countries in Model 1, we might argue that there is good potential for emerging countries to save money and time on environmental costs via the adoption of clean technologies and related policies. Last but not least, on a global scale, energy transition with better utilization of renewable sources holds the key to tackling climate change and reducing emissions.