Analysis of the Impact of U.S. Trade Policy Uncertainty on China’s Grain Trade

Abstract

U.S. trade protectionism has frequently risen recently, and trade policy fluctuations have become increasingly significant. In this context, examining the impact of U.S. trade policy uncertainty on China’s grain trade is of great significance to China’s response to changes in the international trade situation, guaranteeing national food security and promoting sustainable agricultural development. From the statistical data, the U.S. trade policy uncertainty and China’s grain imports primarily show a reverse trend, and China’s grain exports show a positive trend. To further explore the impact of U.S. trade policy uncertainty on China’s grain trade, this study selects the monthly data from July 2003 to December 2022. It conducts impulse response analysis by constructing a vector autoregressive model with stochastic volatility. It is found that the impact of U.S. trade policy uncertainty on China’s grain trade has prominent time-varying characteristics and point-in-time effects, and the impact on different kinds of grain is heterogeneous. In this regard, China needs to clarify the nature of the trade dispute between China and the United States, reasonably utilize the multilateral coordination mechanism of the WTO, coordinate the international and domestic markets, adjust the short board of grain trade, and safeguard the sustainable development of Chinese agriculture.