@article{Tsutsumi:333024,
      recid = {333024},
      author = {Tsutsumi, Masahiko},
      title = {The Economic Consequences of the 2018 US-China Trade  Conflict: A CGE Simulation Analysis},
      address = {2019},
      year = {2019},
      note = {http://hermes-ir.lib.hit-u.ac.jp/rs/handle/10086/29763;  Presented at the 22nd Annual Conference on Global Economic  Analysis, Warsaw, Poland},
      abstract = {This paper aims at evaluating the economic consequences of  the 2018 US-China trade conflict. The potential impact of  the proposed tariff increases is calculated using a global  CGE model. Capital deepening and technological spillover  induced by trade are also taken into account to explore the  long-run influence. We can derive the following  implications. First, the additionally imposed tariffs on  goods alone declines the GDP in the US and China by 0.1%  and 0.2%, respectively. The equivalent variation in the US  and China is reduced by 9.8 billion and 35.2 billion USD,  respectively. Although other countries gain from trade  diversion, losses exceed gains globally. Second,  considering the effect from capital deepening and  technological spillover induced by trade makes the  situation worse. The GDP in the US and China declines by  1.6% and 2.5%, respectively. The equivalent variation in  the US and China is reduced by 199.5 billion USD and 187.1  billion USD, respectively. Again, the trade diversion is  not large enough to recover losses in these countries.  Third, the imposed tariffs distort relative prices,  resulting in changes to the global production structure.  Both the US and China lose their comparative advantage in  transport, electronic, and machinery equipment production,  while other countries expand their production in these  sectors. Finally, China’s retaliatory tariff increases  worsens the US economy to some extent, but it comes at a  cost to the Chinese economy. In the long run, retaliation  is not an appropriate policy response.},
      url = {http://ageconsearch.umn.edu/record/333024},
}