TY - JOUR
T1 - The US-China Trade Dispute: A Macroperspective
AU - Tyers, Rod
AU - Zhou, Yixiao
PY - 2021
Y1 - 2021
N2 - Declining global multilateralism has brought numerous trade disputes, most notably between the US and China. Here, a new global model featuring monetary policy and revenue reassignment are used to examine the effects of this conflict and this macroeconomic perspective proves to be important. The emergent results provide additional insight and complement other "trade-focused" general equilibrium studies. We find that, with capacity adjustment, US unilateral protection emerges as "beggar thy neighbor" policy. China’s proportional losses are large, little mitigated by its retaliation, which nonetheless constrains US net gains. Third regions trading with China and the US suffer losses only partly offset by trade diversion and greatly enhanced if, to avoid leakage, protection is extended to all sources.
AB - Declining global multilateralism has brought numerous trade disputes, most notably between the US and China. Here, a new global model featuring monetary policy and revenue reassignment are used to examine the effects of this conflict and this macroeconomic perspective proves to be important. The emergent results provide additional insight and complement other "trade-focused" general equilibrium studies. We find that, with capacity adjustment, US unilateral protection emerges as "beggar thy neighbor" policy. China’s proportional losses are large, little mitigated by its retaliation, which nonetheless constrains US net gains. Third regions trading with China and the US suffer losses only partly offset by trade diversion and greatly enhanced if, to avoid leakage, protection is extended to all sources.
U2 - 10.1142/S0217590821500041
DO - 10.1142/S0217590821500041
M3 - Article
SN - 0217-5908
VL - Online
SP - 1
EP - 29
JO - Singapore Economic Review
JF - Singapore Economic Review
ER -