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Friends like this: The impact of the US-China trade war on global value chains


  • Mao, Haiou
  • Görg, Holger


This paper considers the indirect impact the recent tariff increases between the US and China can have in third countries through links in global supply chains. We combine data from input-output relationships, imports and tariffs, to calculate the impact of the tariff increases by both the US and China on cumulative tariffs for other countries and thus hurt trade partners further downstream in global supply chains. We also show that this is particularly important for tariff increases on Chinese imports in the US. These are likely to be used as intermediates in production in the US, which are then re-exported to third countries. The most heavily hit third countries are the closest trade partners, namely Canada and Mexiko. We estimate that the tariffs impose additional burden of around 500 to 600 million US dollars on these two countries. China's tariffs on US imports have less of an effect.

Suggested Citation

  • Mao, Haiou & Görg, Holger, 2019. "Friends like this: The impact of the US-China trade war on global value chains," KCG Working Papers 17, Kiel Centre for Globalization (KCG).
  • Handle: RePEc:zbw:kcgwps:17

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    References listed on IDEAS

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    4. Haoyuan Ding & Bo Pu & Tong Qi & Kai Wang, 2022. "Valuation effects of the US–China trade war: The effects of foreign managers and foreign exposure," Journal of Economic Surveys, Wiley Blackwell, vol. 36(3), pages 662-683, July.
    5. Chih‐Hai Yang & Kazunobu Hayakawa, 2023. "The Substitution Effect of US‐China Trade War on Taiwanese Trade," The Developing Economies, Institute of Developing Economies, vol. 61(4), pages 324-341, December.
    6. Huiwen Gong & Robert Hassink & Christopher Foster & Martin Hess & Harry Garretsen, 2022. "Globalisation in reverse? Reconfiguring the geographies of value chains and production networks [Does Covid-19 Spark the End of Globalisation?]," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 15(2), pages 165-181.
    7. Jie Wu & Chan‐Guk Huh & Jacob Wood, 2021. "Globally chained economies, unwitting victims of the US‐China trade war," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 35(2), pages 60-76, November.
    8. Gern, Klaus-Jürgen & Kooths, Stefan & Mösle, Saskia & Stolzenburg, Ulrich, 2019. "Weltkonjunktur im Herbst 2019 - Weltkonjunktur belebt sich nur zögerlich [World Economy Autumn 2019 - World economy picks up only slowly]," Kieler Konjunkturberichte 57, Kiel Institute for the World Economy (IfW Kiel).
    9. Ridley, William & Devadoss, Stephen, . "Determinants of Policy Responses in the US–China Tit-for-Tat Trade War," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 49(2).
    10. Moritz Böhmecke-Schwafert & Knut Blind, 2023. "The trade effects of product market regulation in global value chains: evidence from OECD and BRICS countries between 2000 and 2015," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(2), pages 441-479, May.

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    More about this item


    trade war; cumulative tariffs; indirect tariffs;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade

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