The Trade Effects of the US Tariffs on China (2018–2019): Evidence from Dual Margins Perspective

Based on the reality that the US imposed additional tariffs on Chinese products in 2018–2019, this paper probes into the trade effects of the additional tariffs from dual margins perspective, using monthly import data of the US with its 20 top partners in 2017–2019. The results show that the US imports from China have decreased with the imposition of additional tariffs. It is mainly reflected in the decrease of the intensive margin of the tariff-targeted products, that is, the proportion of the US import from China relative to world has decreased. The conclusion is still stable when expanding the sample of the tariff-targeted products and using 2 months lagged tariffs on China. From the perspective of product heterogeneity: the additional tariffs reduce the imports of existing consumer and capital products on the list along the intensive margin, but have no effect on the imports of intermediate products. We also find the US additional tariffs don’t increase its imports from the third-party markets on the tariff-targeted products and from China on the non-tariff-targeted products.