The US-China Trade Dispute: A Macro Perspective: CAMA Working Paper No. 11/2019

Rod Tyers, Yixiao Zhou

Research output: Working paper

Abstract

The recent rise of populism and authoritarian politics has seen a turn from multilateralism and toward international disputes like that between the US and China. This paper uses a calibrated global macro model to assess the potential economic consequences of this conflict under explicit assumptions about monetary and fiscal policy. US unilateral protection emerges as “beggar thy neighbor” policy, the more so if new tariff revenue affords capital tax relief. China’s proportional losses are comparatively large and little mitigated by retaliation, which nonetheless constrains US net gains. Avoiding leakage by protecting against all sources causes substantial losses in third regions trading with China and the US
Original languageEnglish
DOIs
Publication statusPublished - 6 Feb 2019

Publication series

NameCAMA Working Paper

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