Anti‐dumping duty circumvention through trade rerouting: Evidence from Chinese exporters

Abstract

We study the evasion of US anti‐dumping duties by some Chinese exporters through trade rerouting via third countries or regions. Using detailed monthly trade data reported by China and the US Customs during the period of 2002–06, we find that US anti‐dumping actions against China lead to a stronger positive correlation between US imports from third countries and Chinese exports to the same third countries. Such a positive correlation is more pronounced for the products subject to anti‐dumping duties (treatment groups) than similar products not subject to these duties (control groups). The evidence is stronger for less‐differentiated products whose certificates of origins are easier to be modified and is stronger for third countries where the rerouting cost is low. These findings are consistent with a trade rerouting story, rather than a simple story of trade diversion (i.e., increase in some third countries' imports from China) and trade deflection (i.e., increase in some third‐country exports to the US). We also rule out other alternative stories, consider prior production in third countries and concurrent anti‐dumping actions against China or third countries, pay a particular attention to the many zero trade flows in the monthly level data and check the robustness to using an alternative control group and quarterly data, etc.

The Role of Bike Sharing in Promoting Transport Resilience

“…The daily bike sharing trips data can be noisy due to changeable weather conditions and constantly updated docks. Thus, we also aggregate our data to monthly level to check the robustness of our results (Liu and Shi 2018). The results from the regression using monthly data are reported in Table 6.…”

Anxiety or Pain? The Impact of Tariffs and Uncertainty on Chinese Firms in the Trade War

“…A second explanation is that a third country may have been chosen by Chinese exporters to re-route exports. Liu and Shi (2019) find that trade re-routing has been used by Chinese firms in the past to avoid antidumping duties. 34 Though we cannot formally test firm re-routing behaviors because of data limitations, the recent news report by Chau and Boudreau (2019) suggests that there is a high possibility that some re-routing took place during the U.S.-China trade war.…”

Detecting Anti-dumping Circumvention: A Network Approach

“…Our work is related to the work of Liu and Shi (2019). These authors rely on custom data to study the circumvention of the United States (US) anti-dumping measures by Chinese exporters through trade re-routing via third countries.…”

“…Our work relates closely to the anti-dumping circumvention of Liu and Shi (2019), who also rely on Comtrade data to study events of circumvention of anti-dumping duties by Chinese exporters. This paper contributes to the existing literature by adopting a systematic approach that does not require the user to manually identify the third country by which circumvention might happen.…”