A proposition of lose-lose: Detrimental consequences of trade wars

China's miraculous development has faced major challenges in recent years, partly triggered by the U.S.-China trade war that started in 2018. This paper provides a systematic evaluation of the detrimental consequences of the trade war over the period from 2018:Q1 to 2021:Q1 for China's final demands and industrial outputs as well as for Chinese consumers' and importers' welfare. We construct a Leontief input-output framework with isoelastic demands and complete tariff pass-through, and adopt Harberger's triangle approach to deadweight loss based on partial leakage of tariff revenues. We find that ICT, Furniture, Food, Primary, and Electrical were the most negatively affected sectors in terms of final demand changes, and that the negative impacts on sectoral outputs were largest in ICT and Auto. Our results indicate that Primary, Food, Paper, Petroleum, Chemicals, and ICT incurred the biggest deadweight losses over the entire tariff change, and that Primary, Food, Chemicals, ICT, and Machinery suffer large total losses with 20% tariff leakages. Primary was hurt the most in both measures. China's aggregate total loss amounted to US$1.57 billion, approximately 0.0089% of China's gross output. While the trade war led to a lose-lose outcome, China's aggregate total loss as a percentage of gross output is less than one-fifth of the counterpart in the U.S. Our main findings suggest that it would be Pareto improving to restore the order of globalization by mitigating trade barriers or confrontations.