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Trade Effects of the US–China Trade War on a Third Country: Preventing Trade Rerouting from China

Author

Listed:
  • HAYAKAWA, Kazunobu
  • SUDSAWASD, Sasatra

Abstract

ASEAN countries might function as transshipment platforms for Chinese exports, enabling the evasion of US tariffs imposed on China in the US–China trade war. In response, in November 2019, the Thai government established a watchlist for high-risk products destined for the US and European Union (EU) markets. This initiative mandates exporters to submit additional documents for thorough verification of the origin of goods. We empirically investigate the impact of placing products on Thailand’s exports to the US and EU, as well as its imports from China. The analysis utilizes monthly trade data for Thailand from January 2017 to April 2023. One empirical challenge is the potential presence of reverse causality, in which products experiencing higher export growth to the US or EU may be deliberately selected for inclusion in the watchlist. To address this concern, we focus exclusively on products that meet the criteria for inclusion in the surveillance lists. Results indicate that the implementation of surveillance using the watchlist leads to a decrease in exports from Thailand to the EU. In contrast, exports to the US increased. Moreover, this initiative does not significantly impact China’s imports to Thailand.

Suggested Citation

  • HAYAKAWA, Kazunobu & SUDSAWASD, Sasatra, 2024. "Trade Effects of the US–China Trade War on a Third Country: Preventing Trade Rerouting from China," IDE Discussion Papers 916, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper916
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    US–China disputes|Trade rerouting|Thailand;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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