IDEAS home Printed from https://ideas.repec.org/a/bla/worlde/v44y2021i7p2188-2202.html
   My bibliography  Save this article

Spatial equilibrium analysis of Chinese tariff on world cotton markets

Author

Listed:
  • Ethan Sabala
  • Stephen Devadoss

Abstract

We develop a theoretical and an empirical spatial equilibrium model (SEM) to analyse the effects of the 25% Chinese cotton tariff on United States, Chinese and world markets. The tariff causes US cotton price, production and exports to decrease, while simultaneously increasing China's price and production. The SEM determines the trade reallocations caused by the Chinese tariff. The United States diverts some of its exports to other importing countries, which allows the United States to mitigate some of its losses. Other cotton exporters increase their exports to China at the expense of the United States.

Suggested Citation

  • Ethan Sabala & Stephen Devadoss, 2021. "Spatial equilibrium analysis of Chinese tariff on world cotton markets," The World Economy, Wiley Blackwell, vol. 44(7), pages 2188-2202, July.
    • Handle: RePEc:bla:worlde:v:44:y:2021:i:7:p:2188-2202
    DOI: 10.1111/twec.13045
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/twec.13045
    Download Restriction: no
    File URL: https://libkey.io/10.1111/twec.13045?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. James R. Jones & Shuang L. Li & Stephen Devadoss & Charlotte (Jensen) Fedane, 1996. "The Former Soviet Union and the World Wheat Economy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 869-878.
    2. Jeffrey J. Reimer & Man Li, 2010. "Trade Costs and the Gains from Trade in Crop Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(4), pages 1024-1039.
    3. Luckstead, Jeff & Devadoss, Stephen & Mittelhammer, Ron, 2015. "Imperfect Competition between Florida and Sao Paulo (Brazil) Orange Juice Producers in the U.S. and European Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(1), pages 1-15.
    4. Stephen Devadoss, 2013. "Ad valorem tariff and spatial equilibrium models," Applied Economics, Taylor & Francis Journals, vol. 45(23), pages 3378-3386, August.
    5. Shepherd, Ben, 2006. "Estimating Price Elasticities of Supply for Cotton: A Structural Time-Series Approach," MPRA Paper 1252, University Library of Munich, Germany.
    6. Quirino Paris & Sophie S. Drogue & Giovanni Anania, 2009. "Calibrating mathematical programming spatial models [Calibrage pour les modèles spatiaux de programmation mathématique]," Post-Print hal-02754337, HAL.
    7. Jeff Luckstead & Stephen Devadoss, 2016. "Impacts of the Transatlantic Trade and Investment Partnership on Processed Food Trade under Monopolistic Competition and Firm Heterogeneity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(5), pages 1389-1402.
    8. Roy Boyd & Kerry Krutilla, 1987. "The Welfare Impacts of U.S. Trade Restrictions against the Canadia n Softwood Lumber Industry: A Spatial Equilibrium Analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 20(1), pages 17-35, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:ags:aaea22:335549 is not listed on IDEAS
    2. Devadoss, Stephen & Ridley, William, 2024. "Impacts of the Russian invasion of Ukraine on the global wheat market," World Development, Elsevier, vol. 173(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stephen Devadoss & William Ridley, 2014. "Effects of the Mexican Apple Tariff on the World Apple Market," Review of Development Economics, Wiley Blackwell, vol. 18(4), pages 763-777, November.
    2. Asci, Serhat & Ramaswamy, Karthik & Devadoss, Stephen & Konduru, Srinivasa P., 2020. "Modern Time Trade Wars: Chinese Retaliatory Tariffs vs California’s Tree Nuts industry," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304532, Agricultural and Applied Economics Association.
    3. Reimer, Jeffrey J., 2012. "On the economics of virtual water trade," Ecological Economics, Elsevier, vol. 75(C), pages 135-139.
    4. Valin, Hugo & Havlik, Petr & Mosnier, Aline & Obersteiner, Michael, 2012. "Impacts of Alternative Climate Change Mitigation Policies on Food Consumption under various Diet Scenarios," Conference papers 332253, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Wendkouni Jean‐Baptiste Zongo & Bruno Larue & Carl Gaigné, 2023. "On export duration puzzles," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(2), pages 453-478, March.
    6. Zhe Chen & Zhongzhong Hu & Kai Li, 2021. "The spillover effect of trade policy along the value Chain: Evidence from China's rare earth‐related sectors," The World Economy, Wiley Blackwell, vol. 44(12), pages 3550-3582, December.
    7. Hai Long Vo & Duc Hong Vo, 2023. "The purchasing power parity and exchange‐rate economics half a century on," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 446-479, April.
    8. Shon M Ferguson & Johan Gars, 2020. "Measuring the impact of agricultural production shocks on international trade flows," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(3), pages 1094-1132.
    9. Stephen Devadoss, 2009. "The Softwood Lumber War: Politics, economics, and the long U.S.-Canadian trade dispute," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 18(1), pages 197-203.
    10. Anne‐Célia Disdier & Carl Gaigné & Cristina Herghelegiu, 2023. "Do standards improve the quality of traded products?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(4), pages 1238-1290, November.
    11. Eum Jihyun & Sheldon Ian & Thompson Stanley, 2017. "Asymmetric Trade Costs: Agricultural Trade among Developing and Developed Countries," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 15(2), pages 1-18, December.
    12. Lee, Youngjae & Kennedy, Lynn, 2016. "Asymmetric Trade Flows and Their Implication for Competitiveness, Efficiency and Trade," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235427, Agricultural and Applied Economics Association.
    13. Yue Jin & Chen Chen & Zhanyi Shi, 2021. "Spillover Effect of FDI on Food Exports: Based on Firm-Level Analysis in China," Sustainability, MDPI, vol. 13(9), pages 1-20, April.
    14. Sandy Dall'Erba & Zhangliang Chen & Noé J. Nava, 2021. "U.S. Interstate Trade Will Mitigate the Negative Impact of Climate Change on Crop Profit," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1720-1741, October.
    15. Anania, Giovanni, 2010. "EU Economic Partnership Agreements and WTO negotiations. A quantitative assessment of trade preference granting and erosion in the banana market," Food Policy, Elsevier, vol. 35(2), pages 140-153, April.
    16. Motamed, Mesbah J. & Arriola, Christine & Hansen, James & MacDonald, Stephen, 2013. "Cotton and Hydropower in Central Asia: How Resource Competition Affects Trade," Economic Information Bulletin 262128, United States Department of Agriculture, Economic Research Service.
    17. Janelle Mann & Derek Brewin, 2021. "Investigating the Impact of Trade Disruptions on Price Transmission in Commodity Markets: An Application of Threshold Cointegration," JRFM, MDPI, vol. 14(9), pages 1-7, September.
    18. Santeramo, Fabio Gaetano & Bozzola, Martina & Lamonaca, Emilia, 2020. "Impacts of Climate Change on Global Agri-Food Trade," 2019: Recent Advances in Applied General Equilibrium Modeling: Relevance and Application to Agricultural Trade Analysis, December 8-10, 2019, Washington, DC 339375, International Agricultural Trade Research Consortium.
    19. Ozcan Ozturk, 2018. "Effects of Price Transmission and Exchange Rate Elasticities of Three Developing Countries on the World Cotton Trade," Applied Economics and Finance, Redfame publishing, vol. 5(1), pages 91-101, January.
    20. Stennes, Brad & Wilson, Bill, 2005. "An analysis of lumber trade restrictions in North America: application of a spatial equilibrium model," Forest Policy and Economics, Elsevier, vol. 7(3), pages 297-308, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:44:y:2021:i:7:p:2188-2202. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.