Yi Huang, Chen Liu, Sibo Liu, Heiwai Tang, 25 June 2019

Recent studies have found that US tariffs on China have led to a significant welfare loss and significant increases in consumer prices in the US. This column, taken from a recent Vox eBook, studies firms’ equity market responses to the various tariff announcements by the US and Chinese governments in 2018 and 2019. The responses demonstrate that the structure of US–China trade is much more complex than the simplistic view of global trade that prompted the trade war, and that the winners and losers in the war depend on firms’ positioning in, and exposure to, the global value chains shared by the two countries.  

Yasuyuki Todo, 27 February 2019

Alessandro Nicita, Marcelo Olarreaga, Peri da Silva, 05 April 2018

There are growing signs that a trade war is possible, and that the multilateral trading system may not be able to prevent it. This column asks what would happen with tariffs around the world if countries were to move from cooperative tariff setting within the WTO to non-cooperative tariff setting outside the WTO. It argues that that the resulting trade war with countries exploiting their market power would lead to a 32-percentage point increase in the tariff protection faced by the average world exporter.

Events

CEPR Policy Research