The Impact of the US-China Trade War on Chinese Trade

Abstract

This paper studies the impact of the early 2018 US-China trade war on Chinese trade with the US and other trading partners. A time series regression model was first used to evaluate the trade war effects on aggregate Chinese trade with the US, and it shows that the tariffs had no significant effect on aggregate trade. The paper therefore turns to a sectoral-level analysis. Using data retrieved from the General Administration Customs of the People’s Republic of China, panel data models were used with a difference-in-difference approach to capture the estimated tariff impacts on Chinese trade on individual sectors; results reveal a significant and negative correlation between tariffs and US-China trade. The above finding confirms past studies on evaluating the impacts of the trade war on US trade and the US economy.