Research

Tariffs as Bargaining Chips: A Quantitative Analysis of US-China Trade War
(with Naiyuan Hu and Yuan Mei)

Abstract
The Biden administration has maintained Trump tariffs on Chinese imports, despite the promise to remove them before the 2020 presidential election. We investigate the hypothesis that these tariffs serve as leverage in future trade talks with China. We develop a quantitative model that incorporates disaggregated U.S. regions and international trade linkages to estimate U.S.–China bargaining power and compute the optimal cooperative tariffs under Nash bargaining. Simulation results show that the trade war always improves U.S. welfare in the cooperative equilibrium regardless of bargaining power. With an estimated U.S. bargaining power of 0.47, the trade war with China yields a post-negotiation welfare improvement of 0.04% for the U.S.

Research Assistant to Prof. Lin Ma, Singapore Management University, 2024
Research Assistant to Prof. Christine Ho, Singapore Management University, 2023
Research Assistant to Prof. Pao-Li Chang, Singapore Management University, 2023
Research Assistant to Prof. Yuan Mei, Singapore Management University, 2022-2024