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The impact of US tariffs against China on US imports: Evidence for trade diversion?
Author(s) -
Cigna Simone,
Meinen Philipp,
Schulte Patrick,
Steinhoff Nils
Publication year - 2022
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.13043
Subject(s) - trade diversion , china , tariff , economics , context (archaeology) , trade creation , exploit , international economics , international trade , product (mathematics) , estimation , commercial policy , trade barrier , international free trade agreement , paleontology , computer security , geometry , mathematics , management , political science , computer science , law , biology
We provide evidence on the existence of short‐run trade diversion effects towards third countries as a consequence of tariff shocks. We exploit sudden policy changes in the context of the trade dispute between the United States and China in 2018. Based on a data set covering monthly product‐level information on US imports from 30 countries for the period 2016 until May 2019, we employ a difference‐in‐differences estimation framework. Doing so, we can show a strong negative direct effect of US tariffs on US imports from China, but do not find evidence for significant short‐run trade diversion effects towards third countries.