The Effects of china’s Retaliatory Duties during the China-U.S Trade War

¹Yu Miaojie:National School of Development at Peking University

²Tian Wei:School of Economics Peking University

³Zheng Chunru:Department of Economics, University of Virginia

Published:Sep.2022

Abstract:Using the firm-level customs data of China from 2016 to 2019,we estimate the effects of China's retaliatory duties,including the import performance and then exports.The findings show that the increase in retaliatory duties significantly led to a decrease in imports from the United States,which reveals an effective tit-to-tat on the increased tariffs imposed by the United States.However, due to the import-export linkage within firms,the retaliatory duties also caused a decline in exports to the United States and other countries on both the intensive and extensive margins. We explore the full heterogeneity of response in different sectors and firms.

Keywords: trade war,retaliatory tariffs,import-export linkage