US Trade War Research Articles

US international trade policy: Scenarios of protectionism and trade wars

US international trade policy under both the Trump and Biden administrations has been increasingly protectionist. This paper considers two policy scenarios under active discussion: (1) an across-the-board increase in all US tariffs by 10 percentage points, and (2) a severe escalation of the US trade war with China. The scenarios are analyzed using a multi-country computable general equilibrium (CGE) simulation model of the global economy. Trade wars or policy regimes of widespread protection will increase tariffs in many sectors simultaneously and include both final goods and intermediate inputs. The impacts are complex, with a web of direct and indirect forces coming into play across domestic and international markets. The global CGE model captures these mechanisms, including both short and long-run effects, with and without retaliation by partner countries. In a world economy where the US accounts for only 10 % of global trade and potentially rival trade bloc have emerged in Europe and E&SE Asia, the US is no longer hegemonic in global markets. We find that across-the-board tariffs do not protect manufacturing jobs because the cost of imported intermediate goods increases, raising costs in manufacturing production. The US trade war with China leads to a dramatic fall in bilateral trade. Other countries expand their trade to China and the US with the exception of closely linked partners (e.g. Canada and Mexico and all countries in E&SE Asia). We find that the world economy can adjust to US trade wars, diverting trade around the US.

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.

Dynamic volatility among fossil energy, clean energy and major assets: evidence from the novel DCC-GARCH

The objective of this paper is to assess the dynamic volatility connectedness between fossil energy, clean energy, and major assets i.e., Bonds, Bitcoin, Dollar index, Gold, and Standard and Poor's 500 from September 17, 2014 to October 11, 2022. The main motivation of the study relates to examining the dynamic volatility connectedness mentioned during periods of important events such as the recent coronavirus pandemic and the Russia–Ukraine conflict which has shown the vulnerability of economic and financial assets, energy commodities, and clean energy. The novel Dynamic Conditional Correlation-Generalized Autoregressive Conditional Heteroskedasticity (DCC-GARCH) approach is employed for the investigation of the sample period mentioned. Empirical analysis reveals that both the total and net volatility connectedness between assets is time-varying. The highest connectedness among the assets is observed with the onset of the coronavirus (COVID-19) pandemic, and it increases with some important international events, such as the Russia–Ukraine conflict, the referendum of Brexit, China–US trade war, and Brexit day. On average, the result shows that 32.8% of the volatility in one asset spills over to all other assets. The DCC-GARCH results also indicate that crude oil, bonds, and Bitcoin act as almost pure volatility transmitters, whereas the Dollar index, gold, and S&P500 act as volatility receivers. On the other hand, clean energy is found neutral to external shocks until the first quarter of 2020 and after that time, it starts to behave as a volatility transmitter. Based on the obtained results, we offer some specific policy implications that are beneficial to the US economy and other countries.Graphical Dynamic volatility connectedness between fossil energy, clean energy, and major assets (Bonds, Bitcoin, Dollar index, Gold, and Standard and Poor's 500)

Identification of the Dynamic Trade Relationship between China and the United States Using the Quantile Grey Lotka–Volterra Model

The quantile regression technique is introduced into the Lotka–Volterra ecosystem analysis framework. The quantile grey Lotka–Volterra model is established to reveal the dynamic trade relationship between China and the United States. An optimisation model is constructed to solve optimum quantile parameters. The empirical results show that the quantile grey Lotka–Volterra model shows higher fitting accuracy and reveals the trade relationships at different quantiles based on quarterly data on China–US trade from 1999 to 2019. The long-term China–US trade relationship presents a prominent predator–prey relationship because exports from China to the US inhibited China’s imports from the United States. Moreover, we divide samples into five stages according to four key events, China’s accession to the WTO, the 2008 global financial crisis, the weak global economic recovery in 2015, and the 2018 China–US trade war, recognising various characteristics at different stages.

Bidirectional Risk Spillovers between Chinese and Asian Stock Markets: A Dynamic Copula-EVT-CoVaR Approach

This study aims to investigate bidirectional risk spillovers between the Chinese and other Asian stock markets. To achieve this, we construct a dynamic Copula-EVT-CoVaR model based on 11 Asian stock indexes from 1 January 2007 to 31 December 2021. The findings show that, firstly, synchronicity exists between the Chinese stock market and other Asian stock markets, creating conditions for risk contagion. Secondly, the Chinese stock market exhibits a strong risk spillover to other Asian stock markets with time-varying and heterogeneous characteristics. Additionally, the risk spillover displays an asymmetry, indicating that the intensity of risk spillover from other Asian stock markets to the Chinese is weaker than that from the Chinese to other Asian stock markets. Finally, the Chinese stock market generated significant extreme risk spillovers to other Asian stock markets during the 2007–2009 global financial crisis, the European debt crisis, the 2015–2016 Chinese stock market crash, and the China–US trade war. However, during the COVID-19 pandemic, the risk spillover intensity of the Chinese stock market was weaker, and it acted as the recipient of risk from other Asian stock markets. The originality of this study is reflected in proposing a novel dynamic copula-EVT-CoVaR model and incorporating multiple crises into an analytical framework to examine bidirectional risk spillover effects. These findings can help Asian countries (regions) adopt effective supervision to deal with cross-border risk spillovers and assist Asian stock market investors in optimizing portfolio strategies.

The Impact of External Events on the Industry: Taking the Pharmaceutical and Chip Industries as Examples

The Covid-19 pandemic and the Sino US trade war have been the focus of the international community in recent years. By using the methods of literature review and data analysis, this paper analyzes the short-term fluctuations and long-term development trends of medical devices, chemical pharmaceuticals, Chinese patent medicines and biopharmaceuticals in China under the pandemic situation. It also studies the impact of the measures taken by China and the United States in the chip game, as well as the political significance of the relaxation of chip restrictions in the United States: it seems to be courting China, but in fact it is to suppress Chinese chips more forcefully. The research results of this paper can provide reference suggestions for the policy authorities: there is a large development space for Chinese patent medicine and biopharmaceutical, and information technology also has broad application prospects in the pharmaceutical industry. China should continue to strengthen the research and development of chips to cope with the new round of offensive of the United States.

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

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

Pengaruh bursa saham Regional Asia Tenggara 5, Tiongkok dan USA terhadap IHSG

The 2018–2022 period is one of global economic uncertainty due to the US trade war with China and the economic recession due to the COVID-19 pandemic. These factors put pressure on the financial sector and influence investment behavior. This research aims to determine the influence of five regional stock exchanges in Southeast Asia, China, and the USA, domestic interest rates, and inflation on the IHSG, then compare the periods during the COVID-19 pandemic shock. The research method uses the Vector Error Correction Model (VECM). The analysis results show that the Southeast Asia regional stock exchange has a significant influence in the long term but no influence in the short term. An interesting finding in this research is that several stock exchange variables and domestic interest rates had different influences before and during the shock of the COVID-19 pandemic.

Analysis of Financial Risks and Stock Price Fluctuations of Enterprises under Sino-US Trade Friction

In August 2017, the US initiated a Section 301 investigation against China’s trade practices, and on March 2018, the Office of the US Trade Representative accused China of unfair trade practices ranging from the forced transfer of technology to Chinese firms and intellectual property theft. For these reasons, the United States continues to impose tariffs on Chinese goods. China followed with a series of counter-measures, which became the beginning of a trade war between the two countries. It has a widespread influence on the global markets, international relations and the stability of national economies. This paper collects the stock price fluctuation and financial risk data of Intel before and after the trade war and makes a comparative analysis of the data. We explore how and when the US Trade War came and was framed. Besides China and USA, is there any other country that has had a substantial positive or negative impact from the US Trade War. Finally, we found that how the trade war affects the stock price and change the financial risk of the firms in China and the USA. According to research findings, the trade war had a negative impact on Internet stock prices and financial risks in both countries.

The Analysis of the Decoupling between China and the United States

Since the 2018 Sino US trade war, decoupling from China has gradually become an important policy orientation of the US towards China. Starting from reducing the linkage between the two countries' economic relations, the scope of this policy has now extended far beyond the economic and trade fields, to areas such as technology, the internet, society, and even global governance. From an economic perspective, this article analyzes the respective impacts of the gradual decoupling between China and the United States, and points out that the continued development of both countries requires joint exploration of a better path of harmonious and sustainable development.

The Sino-US Trade Conflicts Impact on Semiconductor Stock Index: Chinas Case

On march 22, 2018, U.S. president trump signed a trade memorandum with China at the White House and restricted Chinese companies investment and acquisitions in the united states. The Sino-US trade war officially started. This trade war lasted for more than a year. China has imposed tariffs on each other six times, which has had a great impact on many fields. This paper background is at the point in time when the Sino-US trade war has just ended. The purpose and content of this paper is related impact of the China and US trade war on my countrys semiconductor industry. This article used to analyze the impact of the trade war through the previous data area, and this paper will use the previous data to predict the future semiconductor trend through the ARIMA model (with the Sino-US trade war as the node), and predict that the Sino-US trade war will have little impact on the daily, some impact on the weekly, and a great on the monthly. Based on our results, people can speculate that from a long-terms perspective, and choose to invest in the semiconductor industry.

The impact of the China–US trade war on firms’ financial performance—Evidence from China

ABSTRACT This study examines the impact of tariff policy on the financial performance of Chinese listed firms and the underlying mechanisms involved during the China–US trade war. Unexpectedly, our analysis using difference-in-differences estimation indicates that the financial performance of firms directly affected by the trade war is slightly better in the short-term compared to unaffected firms. We confirmed these results through robustness checks. Further investigation shows that this unintended consequence can be explained by the strategic allocation of resources to the domestic market, additional subsidies from the government, and a reduction in operating expenses. Our findings provide insight into the real effects of the tariff war on the economy at the firm level.

Time-varying asymmetric volatility spillovers among China’s carbon markets, new energy market and stock market under the shocks of major events

This paper investigates the dynamic asymmetric (good and bad) volatility spillover effects among China’s carbon markets, new energy market and stock market by considering the volatility asymmetry in the markets. We infer the good and bad volatilities from the GJR-GARCH model, where they correspond to positive and negative shocks, respectively. Moreover, we extend the traditional (symmetric) marginal net spillover measure to asymmetric (good and bad) marginal net spillover measures to analyze the time-varying asymmetric transmission of volatility spillovers across markets based on external shocks of major events, including the Sino–US trade war, COVID-19 pandemic, and Russia–Ukraine conflict. Our empirical results show that there exists significantly time-varying asymmetric volatility spillover effects among China’s carbon markets, new energy market and stock market. Moreover, the bad volatility spillover effect dominates the good volatility spillover effect. The asymmetric (good and bad) volatility spillovers across markets increase under the shocks of major events. In particular, we observe that the good volatility spillovers increase more significantly compared with the bad volatility spillovers during the Sino–US trade war and COVID-19 pandemic, while the bad volatility spillovers increase more significantly compared with the good volatility spillovers during the Russia–Ukraine conflict.

Tariff pass‐through: The case of china's WTO accession

Recent studies on the China–US trade war surprisingly find complete tariff pass‐through into import prices for both China and the United States. This paper provides additional evidence of tariff pass‐through in China. Using firm‐level monthly trade transaction data, we estimate the tariff pass‐through for Chinese imports in the period of WTO accession during 2000–2006. Consistent with evidence during the trade war, tariff pass‐through is also complete for tariff reductions induced by the WTO accession. Structural estimates of export supply elasticity also imply complete tariff pass‐through. Additionally, we find the complete pass‐through result holds regardless of firm ownership types, product end‐use, or China's market share in world imports.

Impact of Global Supply Chain Crisis on Chinese Forest Product Enterprises: Trade Trends and Literature Review

The global supply chain crisis caused by COVID-19 and the trend of “anti-globalization” continuously impact international trade. As one of the central processing centers of global primary products, China’s forest product enterprises import raw materials and export manufactured products, which are vulnerable to the worldwide supply chain crisis. This article reviews research on the influence of the pandemic and the Sino–US trade war on the international trade of wooden products and China’s forestry enterprises that import raw timber materials and export wooden products. Furthermore, with the analysis of trade data, we found that China’s forest product enterprises are facing a shortage of wood materials and rising import prices. Regarding export, they face the problems of increased trade costs and fluctuating product demand. Moreover, the influence of the global supply chain crisis causes China’s trade diversion effect. This article comprehensively analyzes how the global supply chain crisis affects wood-based product enterprises and offers suggestions for further developing China’s forestry enterprises.

Preferential Trade Agreements, Geopolitics, and the Fragmentation of World Trade

AbstractFailure to reestablish an effective World Trade Organization (WTO) dispute settlement procedure, stop the erosion of multilateral rules and end the China–US trade war causes capitals to rethink trade policy. One response is to redouble efforts to strike trade agreements with major trading partners. Already countries accounting for about 78% of world Gross Domestic Product (GDP) are members of mega-regional agreements, and based on our computations, preferential trade agreements (PTAs) will soon cover about two-thirds of world trade. Can PTAs replace a fading WTO or mitigate its effects? Amid deepening geopolitical rifts, how will trade relations among China, the EU, and the US, each a hegemon in their respective regions, evolve, and what will be the impact on smaller economies? In short, how will a trading system based increasingly on PTAs and weak multilateral rules look, and how will nations adapt? Absent reforms, the trading system is likely to fragment progressively into regional blocks organized around the hegemons. Trade within the regional blocks, mainly conducted under a mega-regional agreement, will likely remain quite open and predictable, but without strict multilateral rules and where PTAs are absent (as they are among the hegemons), interregional trade relations will become increasingly uncertain and unstable.

The impact of Sino–US trade war on price discovery of soybean: A double‐edged sword?

AbstractIn 2018, the world witnessed a full‐fledged trade war between United States and China with both countries levying successive tariffs on each other. Though the impact of trade war could be visibly assessed from declining export volume and rising bankruptcy filing from farmers, what went unnoticed was a far‐reaching negative impact at a granular market microstructure level. In this study, the effect of trade war on the leading role of US soybean futures in price discovery has been evaluated. The results corroborate the negative impact of trade war on the information leadership share of US soybean futures market. Moreover, the results shows that the negative impact gets manifested through various sentiment indicators such as Google search trends, hedger's sentiment, and so on. Hence, trade war may have given some temporary economic and strategic benefit to the United States, but it is no less than the proverbial double‐edged sword as it nearly killed the soybean market of the United States.

A ‘Soft’ Balancing Ménage à Trois? China, Iran and Russia Strategic Triangle vis-à-vis US Hegemony

The recent rapprochement among China, Iran and Russia reveals the emergence of a new, unexpected, regional strategic triangle with the potential to balance the United States’ dominant position. By focusing on the evolution of this strategic triangle in the post-Cold War period, this article investigates the driving forces that bring the three states together, namely the US power and unilateralism as materialised in NATO’s eastward expansion, the sanctions on Russia after the annexation of Crimea and the war in Ukraine, the sanctions against Iran, the US trade war with China and the hostile US posture during the coronavirus disease-2019 pandemic. Drawing on soft balancing theory, this article provides an empirical assessment of China–Iran– Russia strategies in countering the US power. Thus, this article aims to fill a gap in the existing literature by investigating this triangular relationship and its balancing potential under the analytic construct of a strategic triangle. Finally, the analysis demonstrates that the three states have employed soft balancing mechanisms, primarily economic strengthening and entangling diplomacy in international institutions. At the same time, territorial denial was sought on various occasions due to the regional importance of this triangular relationship. In conclusion, the article also offers insights into potential hard-balancing behaviour in the long run.

The Impact of Sino-US Trade War on The Stock Markets of The Two Countries

This paper analyzes the parallels and variances between the stock markets of the US and China, and the impacts of Sino US Trade War on stock markets in the same countries. The findings are showing that the US and China exchange stock markets are divided into different stock markets and play a critical role in each country’s economy. The stock markets have some differences in the level of development of the accessibility to funds, with the US stock economy being more developed and more integrated into the economy than China's economy. The findings show the Sino-US trade war has been affecting China and the US stock markets negatively. The adverse effects reflect in stock market fluctuations, decline in market capitalization, market equity loss, reduction in prices, and the returns from the stock markets. These adverse effects imply that the Sino-US trade war created more negative impacts than the intended implementation goal.

The impact of Sino–US trade war on the co-movement between China’s stock market and global stock markets

Taking the Sino–US trade war as the background, we study the co-movement changes on horizontal return and volatility of the daily logarithmic return data of global stock indices from 2016 to January 23, 2020 from static and dynamic perspectives. Through static tools such as correlation coefficient matrices, complex networks, and Granger causality, it is found that the trade war has significantly strengthened the correlation between the Chinese stock market and the global stock market, and highlighted the position of the Hong Kong stock market. On dynamic analysis, the news impact surface shows the asymmetry of the co-movement for positive and negative news. The aDCC-EGARCH model is used to observe the dynamic co-movement changes between the Chinese stock market and the global stock market. It shows that trade conflicts have enhanced the co-movement between the Chinese stock market and the global stock market to varying degrees. At the same time, the Chinese stock market is strategically tilted towards the Asian market. Based on the research results in this paper, countries around the world need to pay more attention to the risk contagion between stock markets after the outbreak of the trade war. China’s inland markets should be alert to risk contagion from the Hong Kong market.