The Impact on Australia of Trump's 45 per cent Tariff on Chinese Imports

Dixon, Janine

doi:10.1111/1759-3441.12180

Cited by 8 publications

(3 citation statements)

References 7 publications

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“…(2018) estimate that the income losses in developing countries could range between 0.9% for South Asia and 1.7% for Europe and Central Asia. Dixon (2017) notes that a US–China trade war will not help the domestic manufacturing industry in the United States, as imports from other regions will increase. Bekkers and Schroeter (2020) argue that although the direct effects of the US–China trade war on the global economy are limited, the increase in trade policy uncertainty could close to triple losses.…”

Section: Introductionmentioning

confidence: 99%

Traders' dilemma: Developing countries' response to trade wars

Devarajan

Lakatos

et al. 2020

World Economy

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Since the beginning of 2018, the United States has introduced new tariffs on imports from several trading partners, citing either national security concerns, unfair trade practices, or serious injury to domestic industries. Initially, protectionist measures targeted specific products such as washing machines, solar panels, steel and aluminium and were imposed on imports from most trading partners. Additional tariffs were imposed on imports of certain products from China, which, following a tit-fortat escalation of the dispute, now cover close to all bilateral trade between the two countries. 1 If threatened tariffs on automobiles and parts materialise, they will cause serious disruptions to tightly integrated regional and global value chains (GVCs) and, together with previous measures, impact close to one-third of all US imports.Faced with protectionist measures, numerous trading partners (such as China, Canada, Mexico, EU and Turkey) retaliated against higher US tariffs, while others (such as the Republic of Korea and India) did not. 2 In fact, apart from the trade disputes with the United States, there is no evidence of a worldwide increase in the number of protectionist measures. During the same period, the average number of trade-restrictive measures implemented by G20 economies has declined and remained below the 2012-15 trends (WTO, 2018). Most major economies have continued liberalisation efforts, pursuing market access opportunities under regional trade agreements (RTAs). Since the beginning of 2017, there have been 10 RTAs that entered into force, such as those between the EU and Canada, Canada and Ukraine, China and Georgia, and the EU and many countries. After US withdrawal from 1 As Bown (2019) notes, China's average tariff on US goods was to increase to 25.9% in December 2019, in contrast to the average tariff of 8% in January 2018, before the trade war. Likewise, the average US tariff on goods from China increased to 26.6% in December 2019, up from 3.1% before the trade war.2 See Bown & Kolb (2020) for an up-to-date description of the U.S. trade war.

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Section: Introductionmentioning

confidence: 99%

Traders' dilemma: Developing countries' response to trade wars

Devarajan

Lakatos

et al. 2020

World Economy

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“…Compared to the input–output model, the CGE model links the sectors and industries involved in economic change. The potential economic impact of policy change is accurately simulated from macro perspective, such as trade balance, investment balance, GDP change, factor endowment, government, family, individual behavior (Dixon, 2017 ; Huang Peng et al, 2018 ; Zhengning & Xinlu, 2019 ). Based on this, this paper uses the GTAP model to simulate and decompose the influence of tariffs on the two countries and the world economy under the background of global value chain division of labor and to explore the real potential impact of Sino-US trade friction.…”

Section: Methodsmentioning

confidence: 99%

Analysis on the economic effect of Sino-US trade friction from the perspective of added value

Zhu

Zheng

2021

Environ Dev Sustain

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Based on the theory of trade added value, this paper discusses the potential actual trade scale and benefit damage degree of the two countries under the background of big country game by measuring the real trade scale of China and the USA, simulating the economic impact of tariffs imposed by China and the USA and utilizing Wang–Wei–Zhu (WWZ) method to decompose the potential changes in Sino-US trade. The results show that: firstly, the size of China-US trade in terms of total value is significantly overestimated and China's overall trade with the USA in 2001–2014 was overestimated by an average of 3.06 percent, of which goods trade was overestimated by 8.06 percent. Secondly, although tariff increases can reduce the degree of trade imbalance between China and the USA to some extent, the adverse effects are mutual and global, and the European Union, the Association of Southeast Asian Nations (ASEAN), Japan and Canada become the main transfer countries of Sino-US trade. Thirdly, the pattern of China's final exports and the US' intermediate exports determines that China's trade interests are more damaged than those of the USA. It is proved that there is a big gap between China and the USA in the depth and breadth of China's participation in the value chain division of labor and the trade scale measured by Gross Domestic Product is more instructive than the total value.

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“…Rosyadi and Widodo (2018) used the GTAP model to analyze this policy change and concluded that, if 45% additional tariffs were imposed on manufacturing products by both countries, the real incomes of the United States and China would decline by US$80 billion and US$94 billion, respectively. Similarly, Dixon's (2017) research on 45% additional tariffs on manufacturing products by both countries showed that the real incomes of the United States and China would decline by 0.7% and 2.5%, respectively. Research by Guo et al (2018) shows that, if the US imposed a 45% tariff on all Chinese goods, US real wages would decline by 0.66%; if China imposed a reciprocal tariff, they would decline 0.75%.…”

Section: Literature Reviewmentioning

confidence: 98%

Effects of Eliminating the US–China Trade Dispute Tariffs

Zheng

Zhou

et al. 2022

World Trade Review

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This paper examines the economic implications of the tariff increases by the United States and by China during the Trump era trade dispute and the gains from their potential removal. The increases were dramatic, with the US raising tariffs on industrial products by a factor of six – with particularly large tariff increases on intermediate and capital goods – and China increasing its tariffs on US agricultural products more than five-fold. These changes distort trade and production decisions in both countries and undercut the global trading system. They resulted in substantial economic losses to each country, with import volumes reduced by 4.9% in China and 4.5% in the USA, and bilateral trade patterns were massively distorted. Their cost to the United States rose at the end of 2021, when the import expansion provisions of the Trump era Phase One Agreement expired. Negotiating the abolition of these costly and disruptive tariffs would generate substantial real income gains for both countries and help lower US consumer prices.

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The Impact on Australia of Trump's 45 per cent Tariff on Chinese Imports

Cited by 8 publications

References 7 publications

Traders' dilemma: Developing countries' response to trade wars

Traders' dilemma: Developing countries' response to trade wars

Analysis on the economic effect of Sino-US trade friction from the perspective of added value

Effects of Eliminating the US–China Trade Dispute Tariffs

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