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Impact of Donald Trump’s tariff increase against Chinese imports on global economy: Global Trade Analysis Project (GTAP) model

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  • Saiful Alim Rosyadi
  • Tri Widodo

Abstract

Donald Trump’s presidential campaign contains several trade protectionism plans. This paper aims to analyze possible global impact of United States’ plan to impose import tariff increase against China. The GTAP model is implemented. The simulations present possible short-run effects of full-protection and manufacturing-only protection with appropriate retaliation response from China. The policy might lead to GDP, terms-of-trade, and welfare decline in United States and China; and an increase in trade balance for United States. Trade diversion pattern is observed in the simulation results, predicting shrinking bilateral trade between the two countries and increasing export toward their third trading partners.

Suggested Citation

  • Saiful Alim Rosyadi & Tri Widodo, 2018. "Impact of Donald Trump’s tariff increase against Chinese imports on global economy: Global Trade Analysis Project (GTAP) model," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 16(2), pages 125-145, April.
    • Handle: RePEc:taf:jocebs:v:16:y:2018:i:2:p:125-145
    DOI: 10.1080/14765284.2018.1427930
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    Cited by:

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    6. Wu, Xianhua & Guo, Ji & Song, Shunfeng, 2023. "Influence of international trade disputes on the world industrial economic system based on inoperability input-output model," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 787-803.
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    8. Bin Xu & Boqiang Lin, 2021. "Large fluctuations of China's commodity prices: Main sources and heterogeneous effects," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 2074-2089, April.
    9. Yanfang LYU & Linhui ZHAO & Dong WANG, 2023. "An Analysis of the Impact of US-China Trade Frictions on Chinese Manufacturing Industries from the Perspective of Trade Gains," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 43-56, December.

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