The Impact of US-China Trade War on China’s Exports: Evidence From Difference-in-Differences Model

Abstract

This study examines the impact of the US-China trade war on Chinese exports. Using the monthly export data from January 2017 to October 2022 with a Difference-in-Differences (DID) model, our findings show: First, before the trade war, export trends in China and the control group (the EU, South Korea, Japan, ASEAN, and India) were similar. Second, the trade war dramatically reduced China’s exports to the US, with tariff rises cited as the principal cause. Third, the robustness of our finding was established using a placebo test with 500 random samples. Our policy recommendations include leveraging multilateral negotiation mechanisms, accelerating industrial upgrading, and optimizing trade strategies to address the root causes of trade frictions effectively. JEL Classification: F13, F14, F62.

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