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The Impact of Trade Conflict on Developing Asia

Author

Listed:
  • Abiad, Abdul

    (Asian Development Bank)

  • Baris, Kristina

    (Asian Development Bank)

  • Bertulfo, Donald Jay

    (Asian Development Bank)

  • Camingue-Romance, Shiela

    (Asian Development Bank)

  • Feliciano, Paul Neilmer

    (Asian Development Bank)

  • Mariasingham, Joseph

    (Asian Development Bank)

  • Mercer-Blackman , Valerie

    (Asian Development Bank)

  • Bernabe, John Arvin

    (Asian Development Bank)

Abstract

This paper analyzes the effects of the current trade conflict on developing Asia using the Asian Development Bank’s Multiregional Input–Output Table (MRIOT), allowing us to calculate the impact on individual countries and on sectors within countries. The analysis estimates the direct impact on all tariff-affected goods; uses input–output analysis to estimate indirect effects on gross domestic product (GDP), exports, and employment; and allows for redirection of trade toward other producers using the approach of Feenstra and Sasahara (2017). A full escalation of the bilateral United States (US)–People’s Republic of China (PRC) trade conflict would shave 1% off PRC GDP and 0.2% off US GDP. The rest of developing Asia could see small net gains thanks to trade redirection, particularly in the electronics sector. A trade war in autos and parts would hurt the European Union and Japan. The conflict has substantial negative effects on PRC and US employment, but only minor impacts on current account balances.

Suggested Citation

  • Abiad, Abdul & Baris, Kristina & Bertulfo, Donald Jay & Camingue-Romance, Shiela & Feliciano, Paul Neilmer & Mariasingham, Joseph & Mercer-Blackman , Valerie & Bernabe, John Arvin, 2018. "The Impact of Trade Conflict on Developing Asia," ADB Economics Working Paper Series 566, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0566
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    References listed on IDEAS

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    Cited by:

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    2. Charles Ka Yui Leung & Joe Cho Yiu Ng & Edward Tang, 2020. "Why is the Hong Kong Housing Market Unaffordable? Some Stylized Facts and Estimations," Globalization Institute Working Papers 380, Federal Reserve Bank of Dallas.
    3. Willem THORBECKE & CHEN Chen & Nimesh SALIKE, 2020. "The Relationship between Product Complexity and Exchange Rate Elasticities: Evidence from the People's Republic of China's Manufacturing Industries," Discussion papers 20075, Research Institute of Economy, Trade and Industry (RIETI).
    4. Ayako Obashi, 2022. "Overview of Foreign Direct Investment, Trade, and Global Value Chains in East Asia," Working Papers DP-2021-50, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Gern, Klaus-Jürgen & Hauber, Philipp & Kooths, Stefan & Mösle, Saskia & Stolzenburg, Ulrich, 2019. "Weltkonjunktur im Frühjahr 2019 - Gebremste Expansion der Weltwirtschaft [World Economy Spring 2019 - Reduced momentum in the world economy]," Kieler Konjunkturberichte 51, Kiel Institute for the World Economy (IfW Kiel).
    6. Kim, Dongseok, 2021. "Measuring the Impact of a Trade Dispute with a Supply-side Shock Using a Supply-driven Input-Output Analysis: Korea-Japan Dispute Case," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 43(1), pages 29-52.
    7. Sawada, Yasuyuki & Sumulong, Lea R., 2021. "Macroeconomic Impact of COVID-19 in Developing Asia," ADBI Working Papers 1251, Asian Development Bank Institute.
    8. Jungran Cho & Emma Kyoungseo Hong & Jeongho Yoo & Inkyo Cheong, 2020. "The Impact of Global Protectionism on Port Logistics Demand," Sustainability, MDPI, vol. 12(4), pages 1-17, February.
    9. Ruohan Wu & Mario J. Miranda, 2023. "Dynamic impacts of intermittent trade conflicts," The World Economy, Wiley Blackwell, vol. 46(3), pages 681-701, March.
    10. Willem THORBECKE & Nimesh SALIKE & CHEN Chen, 2020. "Product Complexity, Exports, and Exchange Rates: Evidence from the Japanese Chemical Industry," Discussion papers 20085, Research Institute of Economy, Trade and Industry (RIETI).
    11. Thorbecke, Willem & Salike, Nimesh & Chen, Chen, 2022. "The impact of exchange rate changes on the Japanese chemical industry," Japan and the World Economy, Elsevier, vol. 62(C).
    12. Gu, Xin & Zhang, Weiqiang & Cheng, Sang, 2021. "How do investors in Chinese stock market react to external uncertainty? An event study to the Sino-US disputes," Pacific-Basin Finance Journal, Elsevier, vol. 68(C).

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    More about this item

    Keywords

    exports; input–output; international trade; tariffs; trade conflict; trade redirection;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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