Global Impact of the U.S.-China Trade War in Agricultural Sector

Abstract

This thesis examined the impact of the U.S-China trade war on the global, U.S, and China’s agricultural exports while considering the competing suppliers’ effect using a highly disaggregated HS 6-digit trade flow data in the structural gravity model. The empirical results indicate that the trade war caused about 8.6% and 17% reduction in U.S and China’s agricultural exports, respectively. However, global agricultural export was not negatively impacted during the trade war. Finally, the results also showed that tariff increases by U.S caused an increased in U.S competing suppliers’ exports to China. Similarly, China’s retaliatory tariffs caused an increase in China’s competing suppliers’ exports to the U.S.