Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279247 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10497
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
During the U.S.-China trade war, the U.S. punitive tariffs were almost entirely borne by U.S. importers. In contrast, only 68% of China's retaliatory tariffs were paid by Chinese importers. The puzzling difference between the U.S. and China is mainly driven by their different import structures and product heterogeneity in tariff pass-through. China mainly imported products with lower tariff pass-through from the U.S., such as agricultural products and aircraft, while the U.S. primarily imported products with higher tariff pass-through from China, such as electronics. Furthermore, we decompose the product-level tariff pass-through and show that a higher ratio of import demand elasticity over export supply elasticity leads to lower tariff pass-through under perfect competition.
Subjects: 
trade war
tariff pass-through
import structure
product heterogeneity
demand elasticity
supply elasticity
JEL: 
F13
F14
F61
Document Type: 
Working Paper
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