Recently, a co-authored paper by Professor Miao-Jie Yu, President of Liaoning University, along with Wei Tian, Tenured Associate Professor at the School of Economics, Peking University, and Chunru Zheng, a Ph.D. graduate from the University of Virginia, titled "China-US trade war: Firm import-export linkage along global supply chains," has been officially accepted for publication in the International Journal of Industrial Organization (IJIO), a top international journal in industrial economics.

Paper Abstract:

Over the past decade, the international trade environment has undergone significant changes, with trade frictions and tariff policies re-emerging as critical institutional factors influencing global industrial organization and firm behavior. Particularly since 2016, the escalation of China-U.S. trade frictions and the frequent use of tariff measures in bilateral trade have profoundly impacted firms' production decisions, procurement structures, and transnational supply chain layouts. In this context, systematically assessing the transmission mechanisms of tariff shocks at the industrial organization and firm levels has become a core issue in international economics and industrial organization research.

Existing literature primarily analyzes the welfare effects and trade adjustment pathways of tariff policies from the perspective of macro trade flows, industry-level, or country-level analyses, with relatively limited research on micro-level adjustment mechanisms at the firm level. Especially against the backdrop of highly specialized global value chains, firms often engage in both import and export activities. Tariffs not only directly affect firms' import costs but may also indirectly impact their export performance through input-output relationships. However, existing studies still lack systematic empirical evidence on how import tariffs influence firms' export decisions through their import-export linkages and whether this effect is amplified by the complexity of global supply chain structures.

This paper focuses on China's retaliatory tariff policies on U.S. products from 2016 to 2019. Using firm-level microdata, it examines the transmission mechanisms of tariff shocks within firms and across supply chains from an industrial organization perspective. The study not only analyzes how firms adjust their import sources and product structures in response to tariff increases but also investigates whether firms mitigate tariff shocks through export diversion and assesses the impact of upstream and downstream procurement cost changes on their export performance.

By integrating trade policy shocks with firms' positions in global value chains, this paper provides new empirical evidence for understanding how tariff policies affect firm behavior and industrial organization structures: First, Chinese firms adjust their import portfolios in response to tariff increases. Second, the likelihood of firms shifting exports to other countries is not significant. These findings indicate that, through firm-level import-export linkages, the impact of import tariffs on firm exports exhibits an amplified yet inhibitory effect. Specifically, the inhibitory effect of upstream import tariffs on downstream exports accumulates and becomes more pronounced as the length of the global supply chain increases. Furthermore, rising procurement costs in both upstream and downstream sectors weaken firms' export performance.

Journal Introduction:

The International Journal of Industrial Organization, published by the internationally renowned academic publisher Elsevier, is a top international journal in industrial economics with significant global influence in the field of industrial organization research. The journal consistently focuses on industrial organization theory and empirical analysis, covering core topics such as market structure and competition, firm behavior and strategy, regulation and antitrust policies, technological innovation, and issues related to industry and trade. It serves as a key platform for publishing research in industrial organization and microeconomics.

Authors Profile:

Miao-Jie Yu serves as the Deputy Party Secretary and President of Liaoning University. He is a Fellow of the International Economic Association, a Distinguished Yangtze River Scholar Professor, a recipient of the National Science Fund for Distinguished Young Scholars, an Outstanding Young Scientist of Beijing Municipality, and a Boya Distinguished Professor at Peking University. Currently, he is a deputy to the 14th National People's Congress, a special supervisor of the National Commission of Supervision, and an associate editor of the Economic Journal, a top international journal in economics. He also enjoys the special government allowance from the State Council. He is among the top 1% most-cited scholars in economics and management globally and the only Chinese scholar to date to have received the "Royal Economic Society Prize."

Wei Tian is a tenured associate professor in the Department of International Economics and Trade at the School of Economics, Peking University. Her research focuses on trade liberalization, import-export enterprises, foreign direct investment, and related areas. Her work has been published in domestic and international academic journals such as *Economic Research*, Management World, The World Economy, Economic Journal, The World Economy, and Journal of International Financial Markets, Institutions & Money, among others. Her research achievements have earned her awards such as the "An Zijie" International Trade Research Award. She has also published monographs, including *Outward Foreign Direct Investment of Chinese Enterprises*.

Chunru Zheng completed her master's degree at the National School of Development, Peking University in 2017, and earned her Ph.D. in Economics from the Department of Economics at the University of Virginia, USA in 2025. Her research papers have been published in domestic and international academic journals such as China Economic Quarterly, Asian Economic Papers, and International Journal of Industrial Organization. She currently works as a Data Analyst at TikTok US.