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The US-China Trade War: Spillover Effects on Indonesia and other Asian Countries

Author

Listed:
  • Rudi Purwono

    (Universitas Airlangga)

  • Unggul Heriqbaldi

    (Universitas Airlangga)

  • Miguel Angel Esquivias

    (Universitas Airlangga)

  • M Khoerul Mubin

    (Universitas Airlangga)

Abstract

Approximately 41 percent of Indonesian exports are connected to global production networks, with the United States of America (US) and China as the two main trade partners. A network analysis is employed to trace the impact of US-China tariffs on their partners transmitted via the production networks. A 25 percent bilateral (US-China) tariff will decrease exports from China to the US twice as much as those from the US to China. Indirect exports from Indonesia may fall by US$300 million due to the US' tariffs on Chinese goods and US$36 million due to Chinese tariffs on the US' products. China has decreased the share of inputs originated from its leading input suppliers i.e., Japan and South Korea. The largest impacts of tariffs on Chinese exports to the US are computers, electronics, electrical equipment, textiles, and chemicals. Meanwhile, American goods suffering the largest effects are transportation equipment, chemicals, agricultural, and services.

Suggested Citation

  • Rudi Purwono & Unggul Heriqbaldi & Miguel Angel Esquivias & M Khoerul Mubin, 2021. "The US-China Trade War: Spillover Effects on Indonesia and other Asian Countries," Economics Bulletin, AccessEcon, vol. 41(4), pages 2370-2385.
    • Handle: RePEc:ebl:ecbull:eb-21-00737
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I4-P205.pdf
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    Citations

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    Cited by:

    1. Ignatia Martha Hendrati & Unggul Heriqbaldi & Miguel Angel Esquivias & Bekti Setyorani & Ari Dwi Jayanti, 2023. "Propagation of Economic Shocks from the United States, China, the European Union, and Japan to Selected Asian Economies: Does the Global Value Chain Matters?," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 91-102, January.
    2. Rudi Purwono & Unggul Heriqbaldi & Miguel Angel Esquivias & M. Khoerul Mubin, 2022. "The American–China Trade War and Spillover Effects on Value-Added Exports from Indonesia," Sustainability, MDPI, vol. 14(5), pages 1-22, March.
    3. Rudi Purwono & Lilik Sugiharti & Rossanto Dwi Handoyo & Miguel Angel Esquivias, 2022. "Trade Liberalization and Comparative Advantage: Evidence from Indonesia and Asian Trade Partners," Economies, MDPI, vol. 10(4), pages 1-21, March.

    More about this item

    Keywords

    Trade War; Network analysis; Global Value Chain; Production networks; Spillover effects; Economic globalisation; Global trade; Economic development policy;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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