IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v38y2016icp24-48.html
   My bibliography  Save this article

Impact of temporary trade barriers: Evidence from China

Author

Listed:
  • Chandra, Piyush

Abstract

With a decrease in tariffs around the world, temporary trade barriers (TTBs) have increased dramatically to take their place. These TTBs are usually in the form of antidumping duties, countervailing duties and global safeguards. Recently, an increasing number of these TTBs have been targeted towards China. In this paper, I explore the impact of the US temporary trade barriers (TTBs) on Chinese exports. Using detailed product level data for the period 2002–2008, I find robust evidence of trade deflection i.e. the US trade barriers against China led to an increase in the growth of Chinese exports to other countries. However, I do not find any evidence of trade depression. The results are robust to a wide variety of specification and robustness tests. While I do not find any difference in the impact of TTBs across developed and developing countries, there is considerable heterogeneity in response to TTBs depending on the type of products involved. Specifically, I find that, while the US TTBs on non-steel products lead to an increase in Chinese exports of those products to third markets, there is a significant chilling effect in case of steel. Finally, most of the trade-deflection seems to be along the intensive margins i.e. an increase in exports to the existing third country markets rather than exports to new markets. If anything, the US TTBs on China seem to decrease Chinese exports to newer and more volatile markets.

Suggested Citation

  • Chandra, Piyush, 2016. "Impact of temporary trade barriers: Evidence from China," China Economic Review, Elsevier, vol. 38(C), pages 24-48.
  • Handle: RePEc:eee:chieco:v:38:y:2016:i:c:p:24-48
    DOI: 10.1016/j.chieco.2015.11.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X15001285
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lu, Yi & Tao, Zhigang & Zhang, Yan, 2013. "How do exporters respond to antidumping investigations?," Journal of International Economics, Elsevier, vol. 91(2), pages 290-300.
    2. Chandra, Piyush & Long, Cheryl, 2013. "Anti-dumping Duties and their Impact on Exporters: Firm Level Evidence from China," World Development, Elsevier, vol. 51(C), pages 169-186.
    3. Thomas J. Prusa, 1997. "The Trade Effects of U.S. Antidumping Actions," NBER Chapters,in: The Effects of U.S. Trade Protection and Promotion Policies, pages 191-214 National Bureau of Economic Research, Inc.
    4. Lyon, Thomas & Lu, Yao & Shi, Xinzheng & Yin, Qie, 2013. "How do investors respond to Green Company Awards in China?," Ecological Economics, Elsevier, vol. 94(C), pages 1-8.
    5. Thomas J. Prusa, 2005. "Anti-dumping: A Growing Problem in International Trade," The World Economy, Wiley Blackwell, vol. 28(5), pages 683-700, May.
    6. Bown, Chad P. & Crowley, Meredith A., 2006. "Policy externalities: How US antidumping affects Japanese exports to the EU," European Journal of Political Economy, Elsevier, vol. 22(3), pages 696-714, September.
    7. Robert W. Staiger & Frank A. Wolak, 1994. "Measuring Industry-Specific Protection: Antidumping in the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1994 Micr), pages 51-118.
    8. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    9. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    10. Bown, Chad P. & Crowley, Meredith A., 2007. "Trade deflection and trade depression," Journal of International Economics, Elsevier, vol. 72(1), pages 176-201, May.
    11. Chunding Li & John Whalley, 2010. "Chinese Firm and Industry Reactions to Antidumping Initiations and Measures," NBER Working Papers 16446, National Bureau of Economic Research, Inc.
    12. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    13. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 819-863.
    14. Bowsher, Clive G., 2002. "On testing overidentifying restrictions in dynamic panel data models," Economics Letters, Elsevier, vol. 77(2), pages 211-220, October.
    15. Blonigen, Bruce A. & Bown, Chad P., 2003. "Antidumping and retaliation threats," Journal of International Economics, Elsevier, vol. 60(2), pages 249-273, August.
    16. Thomas J. Prusa, 2001. "On the spread and impact of anti-dumping," Canadian Journal of Economics, Canadian Economics Association, vol. 34(3), pages 591-611, August.
    17. Guobing Shen & Xiaolan Fu, 2014. "The Trade Effects of US Anti-dumping Actions against China Post-WTO Entry," The World Economy, Wiley Blackwell, vol. 37(1), pages 86-105, January.
    18. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    19. Chad P. Bown & Meredith A. Crowley, 2010. "China's export growth and the China safeguard: threats to the world trading system?," Canadian Journal of Economics, Canadian Economics Association, vol. 43(4), pages 1353-1388, November.
    20. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    21. Bruce Blonigen & Thomas Prusa, 2003. "The Cost of Antidumping: the Devil is in the Details," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(4), pages 233-245.
    22. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    23. Stephen Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Crowley, Meredith A & Meng, Ning & Song, Huasheng, 2016. "Tariff Scares: Trade policy uncertainty and foreign market entry by Chinese firms," CEPR Discussion Papers 11722, C.E.P.R. Discussion Papers.
    2. Alim Rosyadi, Saiful & Widodo, Tri, 2017. "Impacts of Donald Trump’s Tariff Increase against China on Global Economy: Global Trade Analysis Project (GTAP) Model," MPRA Paper 79493, University Library of Munich, Germany.
    3. repec:gam:jsusta:v:10:y:2018:i:5:p:1348-:d:143358 is not listed on IDEAS
    4. ZHANG Hongyong, 2017. "Political Connections and Antidumping Investigations: Evidence from China," Discussion papers 17092, Research Institute of Economy, Trade and Industry (RIETI).
    5. repec:bla:apacel:v:31:y:2017:i:2:p:96-114 is not listed on IDEAS

    More about this item

    Keywords

    China; Temporary trade barriers; Trade deflection; Trade depression;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:38:y:2016:i:c:p:24-48. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/chieco .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.