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The end of the trade war? Effects of tariff exclusions on U.S. forest products in China

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  • Muhammad, Andrew
  • Jones, Keithly G.

Abstract

China's importance to the U.S. forestry sector and the disruptive effect of retaliatory tariffs raises questions about how U.S. forest products compete in the Chinese market. The goal of this study was to estimate China's lumber and log import demand and assess how tariffs affect the competitiveness of U.S. products compared to other exporting countries. Using a dynamic framework, we estimated import demand elasticities by exporting country and conducted simulations of China's new tariff exclusion policy for U.S. products. Results indicated that Chinese importers are highly sensitive to U.S. lumber and log prices, which could explain the significant decline in U.S. exports to China when the retaliatory tariffs were imposed. Projections suggest that tariff elimination should benefit U.S. lumber and log exports to China, primarily at the expense of Russian lumber. However, results indicate that China's new tariff exclusion policy may not be enough to get U.S. forest products back to pre-trade war levels.

Suggested Citation

  • Muhammad, Andrew & Jones, Keithly G., 2021. "The end of the trade war? Effects of tariff exclusions on U.S. forest products in China," Forest Policy and Economics, Elsevier, vol. 122(C).
    • Handle: RePEc:eee:forpol:v:122:y:2021:i:c:s1389934120306766
    DOI: 10.1016/j.forpol.2020.102350
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    References listed on IDEAS

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    More about this item

    Keywords

    China; Forest products; Import demand; Lumber; Tariffs; Trade war; United States;
    All these keywords.

    JEL classification:

    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade

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