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Responses of exporters to trade protectionism: Inferences from the US-China trade war

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  • Jiang, Lingduo
  • Lu, Yi
  • Song, Hong
  • Zhang, Guofeng

Abstract

This paper investigates how exports respond to trade protection by studying the US-China trade war in 2018. Using monthly customs data in China from January 2017 to May 2019, we find that the launch of the trade war against Chinese exports by the US on average reduces Chinese total exports to the US by 16.47%. Further decomposition shows that the reduction in exports is mostly explained by a decrease in quantity, with prices relatively unchanged. Meanwhile, negative trade shocks cause export diversion to countries that are closer and have larger economies, and exports in R&D-intensive, skilled-labor-intensive, high-capital-income-share, and upstream industries have been diverted even more. Heterogeneous analyses show that industries with a comparative advantage, high export growth, large export value, and high elasticity of substitution are more responsive to trade protection.

Suggested Citation

  • Jiang, Lingduo & Lu, Yi & Song, Hong & Zhang, Guofeng, 2023. "Responses of exporters to trade protectionism: Inferences from the US-China trade war," Journal of International Economics, Elsevier, vol. 140(C).
    • Handle: RePEc:eee:inecon:v:140:y:2023:i:c:s0022199622001192
    DOI: 10.1016/j.jinteco.2022.103687
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    Cited by:

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    2. Liu, Duan & Wang, Qiuhong & Wang, Aidi & Yao, Shujie, 2023. "Export profitability and firm R&D: on China's export diversification under trade war," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 151-166.
    3. Shota Miki & Yoichiro Tamanyu, 2024. "On the Restructuring of Global Semiconductor Supply Chains," Bank of Japan Working Paper Series 24-E-6, Bank of Japan.
    4. Wei, Hao & Tu, Yue & Zhou, Peng, 2023. "Technical barriers to trade and export performance: Comparing exiting and staying firms," Economic Modelling, Elsevier, vol. 126(C).
    5. TAKEDA Shiro & HIGASHIDA Keisaku & YOMOGIDA Morihiro, 2024. "Evaluation of the Impacts of Trade Restrictions between China and Japan," Discussion papers 24072, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    Keywords

    Exporting; Trade protectionism; US-China trade war;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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