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MMUNITY NEWS
How Did the 2018 U.S.-China
Trade War Affect China’s
Exporters？
By the Stanford Center on China’s Economy and Institutions (SCCEI)
In 2018, the U.S. government initiated a trade Integrated Trade System. From quarterly income
war with China and hiked tariff rates by tax returns, the research team also accessed
25 percentage points on $50 billion worth of information regarding the profit margin of each
commodities and by 10 percentage points on exporting firm in this city. Lastly, the researchers
$200 billion worth of commodities imported conducted an online survey of managers from a
from China. Much has been written about the representative sample of 600 exporting firms in
impact of the U.S.-China trade war on the U.S., the city.
including the complete pass-through of the
tariffs to U.S. consumers (see, e.g., Fajgelbaum • Impact of tariff hikes on export prices.
et al. (2020)). Much less, however, is known
about the impact of the trade war on China. This Research findings indicate that export price per
new research examines the impact of U.S. tariff unit of goods exclusive of tariffs from the sample
surges on China’s exporters, especially with city remained nearly unchanged despite the
respect to their export prices, sales, and profits. U.S. tariff surges, supporting prior research that
showed that the higher total export prices due to
• The data. tariff increases were completely passed onto U.S.
domestic consumers.
Researchers accessed proprietary data from
all firms (approximately 20,000 firms) located • Impact on exports and sales.
in a prefecture-level city in eastern China that
exported to foreign destinations from January The research team also used firm-level data
2013 to April 2019. The research team first to deduce the impact of U.S. tariff increases
ascertained that the value and volume of on the volume of China’s exports to different
exports from this sample city to U.S. and non- markets: i.e., the U.S., other non-U.S. countries,
U.S. destinations closely mirrored the trends in and within China. The findings indicate that the
the rest of the country, indicating that exports tariff shocks significantly reduced the exports of
from this city are largely representative of the firms to the U.S. More specifically, as the price
whole country. of exports, including U.S. tariffs, at the firm-level
increased by 1%, exports to the U.S. dropped
Researchers obtained two datasets from the by 4.16% on average. Exports to the European
local government: a) daily transaction-level Union increased moderately to partially, but
export data for each commodity exported by not entirely, offset the negative impact on
each firm to a foreign country; and b) domestic China’s exports to the U.S., but domestic sales
sales data for each exporting firm. The research and exports to other foreign markets barely
team merged the two datasets to track the changed. In the end, export sales (exports to
value, volume, and price of goods sold by each the U.S. plus exports to non-U.S. markets) and
exporting firm from January 2017 to April 2019. total sales (export sales plus domestic sales)
Data on tariffs were obtained from the World dropped significantly during the sample period.
23 AMCHAM SOUTH CHINA
How Did the 2018 U.S.-China
Trade War Affect China’s
Exporters？
By the Stanford Center on China’s Economy and Institutions (SCCEI)
In 2018, the U.S. government initiated a trade Integrated Trade System. From quarterly income
war with China and hiked tariff rates by tax returns, the research team also accessed
25 percentage points on $50 billion worth of information regarding the profit margin of each
commodities and by 10 percentage points on exporting firm in this city. Lastly, the researchers
$200 billion worth of commodities imported conducted an online survey of managers from a
from China. Much has been written about the representative sample of 600 exporting firms in
impact of the U.S.-China trade war on the U.S., the city.
including the complete pass-through of the
tariffs to U.S. consumers (see, e.g., Fajgelbaum • Impact of tariff hikes on export prices.
et al. (2020)). Much less, however, is known
about the impact of the trade war on China. This Research findings indicate that export price per
new research examines the impact of U.S. tariff unit of goods exclusive of tariffs from the sample
surges on China’s exporters, especially with city remained nearly unchanged despite the
respect to their export prices, sales, and profits. U.S. tariff surges, supporting prior research that
showed that the higher total export prices due to
• The data. tariff increases were completely passed onto U.S.
domestic consumers.
Researchers accessed proprietary data from
all firms (approximately 20,000 firms) located • Impact on exports and sales.
in a prefecture-level city in eastern China that
exported to foreign destinations from January The research team also used firm-level data
2013 to April 2019. The research team first to deduce the impact of U.S. tariff increases
ascertained that the value and volume of on the volume of China’s exports to different
exports from this sample city to U.S. and non- markets: i.e., the U.S., other non-U.S. countries,
U.S. destinations closely mirrored the trends in and within China. The findings indicate that the
the rest of the country, indicating that exports tariff shocks significantly reduced the exports of
from this city are largely representative of the firms to the U.S. More specifically, as the price
whole country. of exports, including U.S. tariffs, at the firm-level
increased by 1%, exports to the U.S. dropped
Researchers obtained two datasets from the by 4.16% on average. Exports to the European
local government: a) daily transaction-level Union increased moderately to partially, but
export data for each commodity exported by not entirely, offset the negative impact on
each firm to a foreign country; and b) domestic China’s exports to the U.S., but domestic sales
sales data for each exporting firm. The research and exports to other foreign markets barely
team merged the two datasets to track the changed. In the end, export sales (exports to
value, volume, and price of goods sold by each the U.S. plus exports to non-U.S. markets) and
exporting firm from January 2017 to April 2019. total sales (export sales plus domestic sales)
Data on tariffs were obtained from the World dropped significantly during the sample period.
23 AMCHAM SOUTH CHINA
