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The US-China Trade War Creates Jobs (Elsewhere)

Author

Listed:
  • Tiago Cavalcanti
  • Pedro Molina Ogeda
  • Emanuel Ornelas

Abstract

We examine the indirect effects of the US-China trade war on Brazil’s labor market. Using industry-specific tariff changes and the sectoral employment distribution across local labor markets, we construct a measure of regional exposure to the trade conflict. Following higher exports to China, our findings reveal that regions more exposed to Chinese retaliatory tariffs on US exports experienced a relative increase in formal employment and wage bills. In contrast, American tariffs on Chinese exports had no significant impact on Brazilian labor markets. These results contribute to a better understanding of the intricate worldwide implications of bilateral trade wars.

Suggested Citation

  • Tiago Cavalcanti & Pedro Molina Ogeda & Emanuel Ornelas, 2025. "The US-China Trade War Creates Jobs (Elsewhere)," CESifo Working Paper Series 11839, CESifo.
    • Handle: RePEc:ces:ceswps:_11839
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp11839.pdf
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    More about this item

    Keywords

    trade war; trade diversion; local labor markets; Brazil.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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