The Impacts of U.S.
Trade War on Chinese Exporters
Assistant Professor of Finance, FISF
Using firm-product level export data
and firm-level sales data covering all exporting firms in a big Chinese
prefecture, this paper investigates responses of Chinese exporters to surged
U.S. tariff rates in 2018. We show that the complete tariff passthrough result,
which has been consistently documented in recent trade war literature with U.S.
data, robustly holds even after controlling for firm-related fixed effects,
making it immune to a survival bias critique. At the firm level, exports to the
U.S. greatly decreased, which is partly offset by the increased exports to
European Union countries, while exports to the rest of the world and sales in
the Chinese domestic market barely changed. We use surveys to complement our
empirical findings to understand the factors underlying firms' responses to
tariff shocks. Among other findings, we find that product standards - as
non-tariff barriers - hinder firms' adjustments of sales to other markets
following tariff barriers' shocks in a particular destination.