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US Trade Actions Against China: A Supply Chain Perspective

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  • Terrie Walmsley
  • Peter Minor

Abstract

In 2018, the United States (US) Administration initiated several trade actions, including tariffs on China for unfair trade practices outlined by the US Trade Representative (USTR). In response, China filed requests for consultations with the World Trade Organization (WTO) and has implemented or threatened to implement increased tariffs on US products. In this article, the implications of current and potential US trade actions and responses by China on the US and global economy are estimated. We employ a dynamic supply chain model based on the widely used Global Trade Analysis Project (GTAP) Data Base and model. Our analysis finds that US gross domestic product (GDP) would be reduced by a projected –0.86 per cent in 2030 (or US$227.8 billion in 2017 dollars), as the role of the USA in global supply chains declines significantly. China’s GDP would also decline considerably by 2.84 per cent as a result of the actions imposed against it, while the rest of the world gain, as they fill the gaps left by US and Chinese producers. JEL: F16, C68

Suggested Citation

  • Terrie Walmsley & Peter Minor, 2020. "US Trade Actions Against China: A Supply Chain Perspective," Foreign Trade Review, , vol. 55(3), pages 337-371, August.
    • Handle: RePEc:sae:fortra:v:55:y:2020:i:3:p:337-371
    DOI: 10.1177/0015732520920465
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    References listed on IDEAS

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    10. Ken Itakura, 2020. "Evaluating the Impact of the US–China Trade War," Asian Economic Policy Review, Japan Center for Economic Research, vol. 15(1), pages 77-93, January.
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    Cited by:

    1. Terrie Walmsley & Adam Rose & Dan Wei, 2021. "The Impacts of the Coronavirus on the Economy of the United States," Economics of Disasters and Climate Change, Springer, vol. 5(1), pages 1-52, April.
    2. Dixon, Peter B. & Rimmer, Maureen T., 2022. "Winners and losers in global supply chain trade: Embedding GSC in CGE," Economic Modelling, Elsevier, vol. 106(C).
    3. Walmsley, Terrie & Rose, Adam & John, Richard & Wei, Dan & Hlávka, Jakub P. & Machado, Juan & Byrd, Katie, 2023. "Macroeconomic consequences of the COVID-19 pandemic," Economic Modelling, Elsevier, vol. 120(C).
    4. Adam Rose & Terrie Walmsley & Dan Wei, 2021. "Spatial transmission of the economic impacts of COVID-19 through international trade," Letters in Spatial and Resource Sciences, Springer, vol. 14(2), pages 169-196, August.

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    More about this item

    Keywords

    U.S. trade actions; China; supply chains; tariffs; global trade model;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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