US-China Trade War Research Articles

Unraveling the Interplay: Financial Inclusion's Impact on Growth, Trade Dynamics, and Foreign Investment – A Comprehensive Empirical Study

The present study develops a Financial Inclusion (FI) index and extends an interlinkage between FI and Economic Growth (EG). The study is the first to develop an FI index created for the main trading nations from 2001-2019 based on financial development, financial depth, and financial stability and creates an association between FI and EG, including trade and foreign investment. Once the FI index is constructed, panel data analysis is applied by examining the stationarity and cointegration of the series, followed by panel regression and causality tests. Findings highlight a strong interlinkage between FI, EG, trade, and foreign investment for the selected nations. It suggests that the nations emphasize financial inclusion to stimulate EG, enhance trade, and increase foreign investment inflows. Each of the three variables is highly integrated, as indicated in the results, and acts as prerequisites for each other. The study is a significant contribution to the field of FI, trade, and EG. As very few studies have been carried out for integrated analysis, this study helps devise policies for expanding further relationships between FI, trade, investment, and EG across nations. Moreover, this study is the first to select a time period that marks major events like the US-China Trade War (2018) and the Global Financial Crisis (2008). The results of this study are helpful to the governments and policymakers of various economies. They can improvise the existing policies and procedures related to trade and foreign investment to enhance FI and EG. It is seen that for each country, the effect of the variables selected is different. In terms of developing holistic and effective trade policies, each nation can assess the relationship between these four key macroeconomic variables.

Navigating the Financial Tides: Hong Kong’s Evolution as an International Hub in Comparison with Global Counterparts

This paper examines Hong Kong’s evolution as an international financial center (IFC) in the face of emerging Asian financial hubs, outlining strategic responses to maintain its status amidst challenges such as the US-China trade war and the COVID-19 pandemic. Through comparative analysis, the study highlights Hong Kong's unique advantages under the "one country, two systems" policy and identifies key areas for future development, including enhancing its offshore RMB market, fostering regional cooperation, and integrating financial technology. The findings suggest a multi-faceted approach to reinforcing Hong Kong's position as a leading financial hub, emphasizing adaptation and innovation in response to global financial dynamics.

Analyzing foreland dynamics in China's port clusters under global major events (2019–2022) by AIS trajectory data

Port foreland, serves as the maritime mirror of the hinterland, encompasses the ports and overseas markets interconnected through shipping services. During major global events, understanding port foreland structures becomes imperative for nations and port authorities to anticipate future trade trends and potential coastal management risks. However, systematic approaches for accurately identifying foreland structures remain lacking, particularly given liner shipping complexities. In response, this paper develops two algorithms to analyze changes in the foreland structure of five port clusters in China for the years 2019 and 2022, leveraging over 2.1 billion global vessel AIS trajectory signals. We aim to understand the foreland dynamics of China's ports amidst the broader impacts of the China-US trade war, the COVID-19 pandemic, and the Russia-Ukraine (RU) conflict, and provide insights for maintaining the global trade continuity. Our findings show that geopolitical events and bilateral relations highly influence port foreland structures, yet global supply chain requirements prompt stakeholders to adopt alternative transport strategies. In 2022, China's foreland structures remain stable despite its strict epidemic control measures. Positive developments in China's port forelands with the US are driven by improving bilateral relations and reduced impacts of the US-China trade war, while conflicts in RU cause shrinkage in Europe. On this basis, we provide three constructive opinions on the development of China's port clusters.

Regional resilience during a trade war: The role of global connections and local networks

Economic sanctions can adversely affect target countries. We study how regions withstand these sanctions amid the US-China trade war. Adopting a geographic relational perspective, we posit that regional resilience hinges on global connections and local networks. Analyzing nightlight data, we find that regional resilience is closely tied to the nature of global connections: cities prioritizing high-value-adding exports perform better, while those reliant on foreign firms for exports and focused on processing trade are more vulnerable. Furthermore, cities with economic development zones exhibit greater resilience to the trade war, underscoring the importance of networks within these zones in mitigating adverse effects.

Article: Bidonomics Versus Maganomics: Pick Your Poison

This essay examines the international trade policies of Joseph Biden and Donald Trump, the two presumed candidates for President of the United States in 2024. I first analyse the trade law revolution effected by the Trump presidency, 2017–2021. During these years the Trump administration adopted a protectionist policy rooted in nationalism and populism. As a direct result of Trump administration trade policy there occurred: (1) a significant retreat from globalization; (2) paralysis of the World Trade Organization (WTO); (3) a revival of US unilateralism in trade policy; and (4) the US-China trade war. When Joseph Biden became president in 2021, he did not reverse the Trump trade policies. Declaring his favour of a ‘worker-oriented’ trade policy, the Biden administration defended Trump’s tariff policies while continuing his hostility to both new free trade agreements and the multilateral trading system. Biden’s distinctive addition to Trump’s trade policy is a protectionist industrial policy featuring subsidies and a ‘buy American’ mandate. Despite these similarities, Trump and Biden propose very different international trade policies for 2025 and beyond. Trump intends to adopt across the board protectionist tariffs of at least 10% on all imports and tariffs of at least 60% on all Chinese imports. The former tariffs will provoke numerous tit-for-tat trade wars; the latter tariffs will economically ‘decouple’ China and the United States. Both policies will raise prices and slow global economic growth. On the other hand, Biden eschews new tariffs. American policy will be rooted in industrial subsidies and ‘buy American’ protectionism. Critics of both Trump and Biden propose a ‘third way’ set of international trade policies that avoid protectionism. This ‘third way’ would feature new free trade agreements with Asian- Pacific, European, and Western Hemisphere nations, a revival of multilateralism and the WTO, and a more constructive trade relationship with China.

The Impact of Green Supply Chain Management Practices on Return on Equity : A Comparative Study between the United States and China

The primary aim of this study is to assess the relationship between Green Supply Chain Management (GSCM) practices and the Return on Equity (ROE) of industrial sector firms in the United States and China during the implications of the US-China Trade War. Principal Component Analysis and Random Effects Regression Analysis are employed to empirically test the impact of four Green Supply Chain Management practices which are: Internal Environmental Management, Green Purchasing, Eco Design, and Customer Cooperation on ROE. A sample of 50 firms in the US and 50 firms in China is employed to test the hypothesized relationships. Findings suggest that there is a significant positive relationship between Eco Design and ROE in both countries. However, a significant negative relationship between Internal Environmental Management and ROE is concluded in China only. This research contributes to identifying out and classifying the reported practices of the Green Pillar in firms’ Environmental, Social and Governance (ESG) reports under their related Green Supply Chain Management practices to provide a theoretical framework and facilitate future research. This paper proposes that policy makers, managers, and practitioners should accept sustainability as a strategic priority prior to implementing Green Supply Chain Management and suggests that firms should be confident of the long-term profitability of implementing Green Supply Chain Management practices.

The US-China Trade War in the 21st Century: A Critical Analysis

China is a growing economy in the 21st Century with 18,536 (USD billion) GDP in 2024 while the USA is in rank 1st with 28,783(USD billion) GDP. Both Powers are trying to indulge other countries in economic deals. BRI, CPEC, and many other projects started by China to open the world market and expand trade. It's a check for the Economic Hegemonic design of the USA. Both Countries are trying to level each other. The rivalry between the US and China is going verse day by day and it is impacting on hegemony of other developing states. The purpose of this qualitative research is to elucidate the US-China trade war in the 21st century in the global world and how it is affecting the others actors in the World.

The Causes and Solutions of the China-US Trade War

In recent years, with the continuous development of the global economy and the deepening of the globalization process, the international trade pattern is undergoing major adjustments. Among them, the trade relationship between China and the US, the two largest economies, has been the focus of attention. However, the recent outbreak of the China-US trade war has brought great uncertainties and challenges to the global economy, and the strategic analysis to solve the China-US trade war is also the core content of this study. We need to explore the possibility and difficulty of appealing to the World Trade Organization, and the possibility and challenge of pursuing bilateral negotiations. In addition, we need to consider third-party arbitration mechanisms in the China-US trade war, with a view to finding effective ways to resolve trade disputes.The purpose of this study is to explore its impact on the two countries and the global economy through an in-depth analysis of the China-US trade war, and to provide references for the resolution of the China-US trade war.

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.

The US–China Trade War: Quantify the Negative Shocks to Local Housing Markets and Land-Based Finance in Chinese Cities

The US–China trade war’s impacts on Chinese cities’ housing markets and local public finance are examined. In China, institutional reforms and ever-growing housing prices in the past resulted in land-based finance that city governments heavily rely on land sales (state-land use-right transfers) for fiscal revenues. However, the trade war has severely struck the cities’ housing markets and land sales since 2018. This article applies 2016–2019 data to a shift-share analysis and finds the following. Imposed by the US on imports from China, the retaliatory tariffs hurt Chinese cities’ production and caused employment and wage declines and firm exit. Importantly, the tariff shocks also affected housing and land markets. A one percentage point (p.p.) increases in the (weighted average) tariffs applicable to cities’ exports reduced cities’ new home sale volume by 3.1% and prices by 1.2%. Besides, city governments’ land sale revenues dropped 7.6%. Since the applicable tariffs to cities increased by 1.62 p.p. on average and 10.4 p.p. at the extreme by 2019, many cities’ housing markets and public finance have hit trouble. The resilient cities to the tariff shocks were those with less overbuilding, more population, more diversified industries or export destinations, or a stronger tertiary sector.

Relationship between supply chain disruption orientation and firm’s resilience in China: the dynamic capabilities perspective

ABSTRACT This study attempts to reveal the relationship between supply chain disruption orientation (SCDO) and firm’s resilience in China under the background of the US–China trade war. Furthermore, the paths to build firm’s resilience through resource reconfiguration and organizational learning (OL) are explored with dynamic capabilities theory. We adopt mixed-methods research design, collecting survey data from 220 Chinese manufacturing firms to test the conceptual model with partial least squares structural equation modelling and second-hand data from Dow Jones Factiva to conduct theme analysis. The results show that resource reconfiguration and OL have full mediation effect on the relationship between SCDO and firm’s resilience, respectively.

Analysis of the Inevitability of the US-China Trade War Based on the Differences in the Economic Development Models of China and the US

Analysis of the Inevitability of the US-China Trade War Based on the Differences in the Economic Development Models of China and the US

US–China trade war and key digital technology innovation of Chinese enterprises

ABSTRACT We empirically examine the impact of the US–China trade war (trade war) on Chinese firms’ key digital technological innovation (KDI) using the difference-in-difference (DID) method, considering trade war as a quasi-natural experiment. Our findings suggest that the trade war promotes Chinese firms to apply for more key digital technology patents (KDPs). Heterogeneity analysis reveals that the promotion is stronger in firms of lower leverage and high-tech industries. Additional analysis indicates that KDI helps mitigate the adverse impact of trade war on Chinese firms’ market performance.

The US-China Trade War and Global Reallocations

The US-China Trade War and Global Reallocations

The impacts of the China–US trade war on China’s trade and greenfield investment

We assess the impacts of the China–US trade war on the bidirectional trade and investment flows of China. We find that China’s exports and imports both dropped sharply after the trade war began. In terms of investment flows, we find that China’s greenfield investment in the US faltered in the face of the increasing trade friction, but the impact of the trade war on the US’s greenfield investment in China is ambiguous. In addition, the trade friction only impeded the export volumes of China and had an insignificant impact on the export prices. In contrast, both the import volumes and prices for China decreased.

Global semiconductor supply chain resilience challenges and mitigation strategies: A novel integrated decomposed fuzzy set Delphi, WINGS and QFD model

The recent COVID-19 pandemic, Ukrainian-Russian conflict, China-US trade war, and current environmental concerns regarding carbon emissions have all made the semiconductor supply chain (SCSC) more vulnerable. In addition, the uncertainty of global SCSC is increasingly obscured owing to several resilience challenges within the exiting supply chain network. Thus, supply chain resilience issues are becoming popular among researchers and policymakers. Unfortunately, there is a lack of systematic research on evaluation of resilience challenges and mitigation strategies for the global SCSC. Additionally, existing models are incompetent to capture the optimistic and pessimistic views of experts during interaction assessment and mitigation strategy evaluation in an uncertain environment. Hence, this research, for the first time, develops a novel integrated Decomposed Fuzzy Set (DFS)-based Delphi, Weighted Influence Non-linear Gauge System (WINGS), and Quality Function Deployment (QFD) model to identify and assess strength-interaction relationship between resilience challenges and mitigation strategies. The findings demonstrated that out of thirteen resilience challenges, seven were identified as causal group resilience challenges while the remaining six were classified as result group resilience challenges indicating that addressing the causal group resilience challenges may directly influence the mitigation of the result group resilience challenges. According to findings of DFS-WINGS analysis, the resilience challenges “Geopolitical tensions” and “Natural disasters” are the two most priority causal group resilience challenges that can significantly influence the result group system components. Furthermore, the DSF-QFD analysis confirmed that the mitigation strategies “Investing in semiconductor R&D and developing regional semiconductor manufacturing facilities” and “Diversification of key components suppliers and promoting domestic manufacturing” received the highest correlation among the mitigation strategies to address the current resilience issues faced by global SCSC. The study findings make a significant contribution to policymaking. The roles of resilience challenges and importance of mitigation strategies both can be used as benchmarks for the SCSC to make the global SCSC more resilient and sustainable.

Political risk and firm exit: evidence from the US–China Trade War

When do political risks lead to divestment from a profitable market? Existing theories argue both that foreign investors may be sensitive to political tensions, but that they may only be sensitive to violent conflict. Using the crucial case of the US–China Trade War, we outline how political risks increased rates of exit among foreign firms while firm entrenchment mitigated these risks. Using a new dataset on all foreign-invested enterprises registered in China between 2017 and 2019, we implement triple interaction models to isolate the impact of increased political risks, investor national origin, and entrenchment on firm exit. Our findings show that heightened political risks during the trade war did increase firm exits by 34% – 3% points over the pre-conflict baseline. Tariffs, the targeted effect of the trade war, increase US firm exits by 1% point. Firm exit is determined by the balance of heightened political risks against the availability of firm-level resources to mitigate these risks. These findings reconcile the conflicting expectations of the ‘business as usual’ and ‘follow the flag’ literatures about how firms respond to political risk, highlighting the tremendous collateral damage tariffs can cause in an age of global value chains.

The US–China trade war and corporate innovation: Evidence from China

AbstractThis study investigates the effect of the US–China trade war on corporate innovation in the context of China. We find that the first‐order effect of the trade war on corporate innovation is significantly negative. That is, Chinese firms exposed to the US–China trade war have lower numbers of patent applications and invention patent applications. Underlying mechanisms include reductions in market expansion and innovation input. Our findings are more pronounced for firms connected to the United States and those suffering financial distress and for non‐state‐owned enterprises. We further contribute to the literature by showing that firms with developed managerial ability, more confident managers, and better corporate social responsibility performance tend to increase innovation for competitiveness in response to the trade war. Finally, we explore the effect of Chinese retaliatory tariff shocks on corporate innovation and find that US tariffs and Chinese retaliatory tariffs hinder corporate innovation in China.

NewGen Surgical: reimagining health for people and planet

Research methodology The case study draws on structured interviews with Rob Chase, Founder and CEO of NewGen Surgical, as well as secondary data sources to analyze the effectiveness of these solutions in mitigating the risks and enhancing the company’s competitive advantage. Case overview/synopsis This case study examines how NewGen Surgical, a small- to medium-sized medical equipment manufacturer based in the USA, navigates a supply chain crisis caused by post-pandemic (COVID-19) supply and demand distress, trade restrictions, and the US–China trade war in 2022. It outlines the journey of CEO and Founder, Robert Chase, as he started, grew and is maintaining the company and its various challenges. The case study reviews the risks and vulnerabilities of the company, which heavily relies on Chinese suppliers for most of its operations. To address the supply chain challenges, the case study explores alternative solutions such as insourcing, reshoring, diversifying the supplier base, changing safety stock and implementing new technologies. The case can be designed to teach business courses such as global business, supply chain and entrepreneurship. Complexity academic level This case study is intended for undergraduate and graduate students in courses such as global business, supply chain and entrepreneurship. In addition, this case study may be incorporated with modules on learning organizations, knowledge management and entrepreneurship to aid students in comprehending the principles of global sourcing, offshoring and supply chain management.

Green bonds and traditional and emerging investments: Understanding connectedness during crises

This paper investigates dynamic connectedness between US green bonds and major implied volatility indices from stock, crude oil, gold, exchange rate and cryptocurrency markets through the application of a novel TVP-VAR frequency connectedness approach of Chatziantoniou et al. (2023) for the first time. The specific goal of this paper is to explore how uncertainty from different financial markets could affect the US green bonds during three major events that resulted in substantial financial market instability, such as the US–China trade war, the COVID-19 pandemic, and the Russia–Ukraine conflict. Firstly, there is a relatively low connectedness between green bonds and all implied volatility indices. Secondly, the degree of transmission is notably influenced by such extreme events. Thirdly, the US green bond market is a receiver of each of the analysed stock, oil, and gold markets, while it is a transmitter of exchange rate and cryptocurrency markets. Fourthly, the US green bond functioned as the primary shock transmitter for the cryptocurrency market during the COVID-19 outbreak, but it shifted to being a receiver of shocks during the Russia–Ukraine conflict. Lastly, connectedness between the green bond market and other financial markets is predominantly driven by short-term frequencies. Our results are crucial for understanding the evolution of green bonds, especially during turbulent periods, and assessing green bonds’ classification as safe assets. Such findings also show that black swan events have been deeply disruptive to the green transition, with specific relevance to policymakers and market participants.