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The 2018 Trade War: Data and Nascent General Equilibrium Analysis

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Abstract

This study introduces a database of 2018 tariff increases resulting from the recent trade war and quantifies the impacts using the canonical GTAPinGAMS model calibrated to GTAP version 9 accounts. We report relatively modest economy-wide welfare impacts in this perfect-competition Armington model, with substantial impacts on the pattern of trade and output in important sectors. JEL codes: F11, F12, F17

Suggested Citation

  • Minghao Li & Edward J. Balistreri & Wendong Zhang, 2018. "The 2018 Trade War: Data and Nascent General Equilibrium Analysis," Center for Agricultural and Rural Development (CARD) Publications 18-wp587, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:18-wp587
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    References listed on IDEAS

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    1. Balistreri, Edward J. & Hillberry, Russell H. & Rutherford, Thomas F., 2011. "Structural estimation and solution of international trade models with heterogeneous firms," Journal of International Economics, Elsevier, vol. 83(2), pages 95-108, March.
    2. Hertel, Thomas & Hummels, David & Ivanic, Maros & Keeney, Roman, 2007. "How confident can we be of CGE-based assessments of Free Trade Agreements?," Economic Modelling, Elsevier, vol. 24(4), pages 611-635, July.
    3. Balistreri, Edward J. & Rutherford, Thomas F., 2013. "Computing General Equilibrium Theories of Monopolistic Competition and Heterogeneous Firms," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1513-1570, Elsevier.
    4. Balistreri, Edward J. & Markusen, James R., 2009. "Sub-national differentiation and the role of the firm in optimal international pricing," Economic Modelling, Elsevier, vol. 26(1), pages 47-62, January.
    5. Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
    6. Bruno Lanz & Thomas F Rutherford, 2016. "GTAPinGAMS: Multiregional and Small Open Economy Models," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(2), pages 1-77, December.
    7. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    8. Gopinath, G. & Helpman, . & Rogoff, K. (ed.), 2014. "Handbook of International Economics," Handbook of International Economics, Elsevier, edition 1, volume 4, number 4.
    9. Balistreri,Edward Jay & Tarr,David G., 2018. "Comparison of Welfare Gains in the Armington, Krugman and Melitz Models : Insights from a Structural Gravity Approach," Policy Research Working Paper Series 8570, The World Bank.
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    Cited by:

    1. Lionel Fontagné & Cecilia Bellora, 2019. "Shooting oneself in the foot? US trade policy coping with Global Value Chains," Post-Print hal-02128135, HAL.
    2. Lee, Meongsu & Westhoff, Patrick, 2020. "The U.S.-China Trade war and Impact on Land Returning to Soybean Production from the Conservation Reserve Program," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304518, Agricultural and Applied Economics Association.
    3. Wenting Wang & Longbao Wei, 2021. "Impacts of agricultural price support policy on price variability and welfare: Evidence from China's soybean market," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 3-17, January.
    4. Biyik, Onur, 2020. "Winner and Loser in Terms of the FTAs and the Trade War: Case Study of the Japanese Market. Examination of the GTAP10 Database," Conference papers 333233, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Terrie Walmsley & Peter Minor, 2020. "US Trade Actions Against China: A Supply Chain Perspective," Foreign Trade Review, , vol. 55(3), pages 337-371, August.
    6. Nikolaos A. Kyriazis, 2021. "Trade Policy Uncertainty Effects on Macro Economy and Financial Markets: An Integrated Survey and Empirical Investigation," JRFM, MDPI, vol. 14(1), pages 1-20, January.
    7. Cecilia Bellora & Lionel Fontagné, 2019. "Shooting Oneself in the Foot? Trade War and Global Value Chains," Working Papers 2019-18, CEPII research center.
    8. James A. Giesecke & Nhi H. Tran & Robert Waschik, 2021. "Should Australia be concerned by Beijing’s trade threats: modelling the economic costs of a restriction on imports of Australian coal," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(1), pages 1-22, January.
    9. Bekkers, Eddy & Schroeter, Sofia, 2020. "An economic analysis of the US-China trade conflict," WTO Staff Working Papers ERSD-2020-04, World Trade Organization (WTO), Economic Research and Statistics Division.

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    More about this item

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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