Anxiety or pain? The impact of tariffs and uncertainty on Chinese firms in the trade war

Benguria, Felipe; Choi, Jaerim; Swenson, Deborah L.; Xu, Mingzhi

doi:10.1016/j.jinteco.2022.103608

Cited by 106 publications

(30 citation statements)

References 36 publications

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“…In 2019, the US imposed higher import duties on a wide range of Chinese goods, as well as increased previously imposed duties. China's response has contributed to increased trade policy uncertainty and companies rethinking their business strategies (Benguria et al, 2022). The restriction of wheat exports by India in May 2022 accelerated the growth of world prices: on the Chicago Mercantile Exchange, prices for food wheat increased by 2% in one day (from $396/t to $400/t) (The Barchart, 2022).…”

Section: Resultsmentioning

confidence: 99%

Improvement of customs and tariff regulation as a factor of sustainable development

Dolgova¹,

Novikov²

2022

Sustainable and Innovative Development in the Global Digital Age

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The paper discusses the role of prices and customs tools in maintaining a competitive environment, reveals their interaction in the economic mechanism of Russia. The need for more and more complete satisfaction of social needs underlies the competitive struggle between countries for limited global resources. One of the ways of this struggle is international trade, by which each country should strive to export as many goods as possible with high consumer properties, requiring to use highly skilled labor, enabling to maximize economic benefits. Meantime, it becomes necessary to regulate the imports of foreign-made goods by establishing customs duties on the imports of the manufacturing industry. In modern conditions, customs duties often become a tool of political struggle. In this context, the purpose of the paper is to develop ways to improve the economic mechanism of Russia through prices and customs duties, and to develop their interaction, focusing on creating equal competitive conditions for the sale of domestic and imported products with the help of prices and customs duties. Research methods include analysis and synthesis, induction and deduction, systemic, logical. The result of the study is a set of specific measures to improve customs and tariff regulation, including a formula for an equal price for imported and domestic products. Equal competitive conditions for domestic and imported products are the key to sustainable economic development.

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Section: Resultsmentioning

confidence: 99%

Improvement of customs and tariff regulation as a factor of sustainable development

Dolgova¹,

Novikov²

2022

Sustainable and Innovative Development in the Global Digital Age

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“…To demonstrate this, we study the welfare effects of the trade tension between the United States and China in recent years. In particular, we consider the effects of an increase in the iceberg trade costs from the United States to China by 12.9% and from China to the United States by 17.0%, which corresponds to the average increase in the tariffs in the years 2017–2019 (Benguria et al., 2020). Since tariffs are part of the iceberg trade costs, it is reasonable to model the tariff war as an increase in

\tau

, although we should note that we are abstracting from changes in government revenues.…”

Section: Welfare Implications: Us‐china Trade Tensionmentioning

confidence: 99%

Flexibility and Productivity: Toward the Understanding of Firm Heterogeneity

Macedoni

2022

Int Economic Review

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We document four new stylized facts using Chinese firm-level data to show that the standard singleattribute model of trade, in which firms only differ in productivity, must be augmented with an additional layer of heterogeneity to match the facts. To match the evidence, a model requires heterogeneity in flexibility, namely, the ability to introduce new varieties in a destination at low costs. We calibrate our model and find suggestive evidence of a trade-off between productivity and flexibility. Furthermore, we show that ignoring firm flexibility causes a large underestimation of the welfare effects of trade.

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“…In addition to local companies that obtain from China, foreign-based companies with operations in the United States may have a greater motivation to speak out against the tariffs (Benguria et al, 2022). In fact, public comments submitted to the U.S. Trade Representative (USTR) concerning one of the initial three circumstances of Section 301 tariffs show that nearly 86% of something like the 4000 companies are opposed to tariff barriers, and 88% indicate that tariffs would disrupt their supply lines (Benguria, 2019).…”

Section: Introduction 1research Backgroundmentioning

confidence: 99%

The Impact of Nationalism of Consumers Loyalty: A Case Study of Multinational Retail Firms in China

Wu¹,

Latip²,

Mohammad³

et al. 2023

JSSM

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Contradictory ideas about China as a country and a state are being marketed to the public by promoting nationalism and transnationalism regarding multinational businesses. Thus, using a case study approach with Multinational Retail Companies in China, this research aims to examine the effect of nationalism on brand allegiance among Chinese customers. This phenomenon has been regarded as a metaphor for China's uncertainty and fear of its cultural heritage and global capitalism. On the one hand, Chinese commercials peddle pride by highlighting the country's rich past, current events, and illustrious dynasties. Conversely, Chinese commercials use Western icons and ideals to glamorize their wares. As part of their effort to integrate "Chineseness" with global capitalism, Chinese marketers also peddle a form of nationalism that combines elements of both transnationalism and the traditional nationalist ideology. Nationalism and transnationalism emerge as competing conceptual frameworks for understanding China in an industrialized world characterized by unequal relationships of power between both China and the West. This study shows that the business strategies, ownership structures, years in China, and capital expenditures of U.S. MNCs in China all vary significantly because of trademark royalties. This, in turn, affects how businesses evaluate political risk and decide among available responses to the trade dispute. The research in this paper shows that economic nationalism has a negative impact on the operation of multinational retail enterprises in China. This paper analyzes the factors and ways of influence through case studies. On the one hand, it helps multinational companies to provide suggestions for better localization strategies in China, and on the other hand, it can provide a reference for Chinese enterprises to go global.

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Anxiety or pain? The impact of tariffs and uncertainty on Chinese firms in the trade war

Cited by 106 publications

References 36 publications

Improvement of customs and tariff regulation as a factor of sustainable development

Improvement of customs and tariff regulation as a factor of sustainable development

Flexibility and Productivity: Toward the Understanding of Firm Heterogeneity

The Impact of Nationalism of Consumers Loyalty: A Case Study of Multinational Retail Firms in China

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