Although Chinese exports to the United States hit an all-time high in 2022, it would be incorrect to conclude that the U.S.–China trade war had no effects on trade. By exploiting fine product-level information on trade war tariffs, this paper demonstrates how the trade war diminished China's exports to the United States in tariff-impeded products, while expanding opportunities for exports from other countries in a fashion that had some systematic characteristics. First, the impact of the trade war tariffs was not immediate, as trade responses took place with a lag. Second, the responses to trade-war tariffs were heterogenous across countries and regions, with finer distinctions by product categories. Finally, trade that could be viewed as highly tied to global value chains (GVCs), such as trade in information and communication technology products, exhibited stronger reactions to the imposition of trade-war tariffs. These responses, and their implications for the organization of global supply chains, are discussed considering current trade concerns.

The United States declared trade war after substantial defections from the internationalist (in geo-strategy and economics) lobby in U.S. politics to a new coalition between conflict-is-inevitable activists and anti-globalization proponents. Many internationalist businesses changed sides after experiencing disappointments on economic fronts including China's non-compliance with some of its World Trade Organization (WTO) obligations, China's acquisition of foreign technology at lower-than-expected prices, and the serious inadequacies in the WTO's governance of global trade. Many of the disillusioned internationalists have given too much weight to the contribution of globalization to negative developments in the U.S. labor market, and too little weight to the role of powerful capital-biased technological changes and to the inadequacies of state-provided programs for social insurance and human capital formation. Resolution of the trade war and prevention of its frequent occurrence will become more likely when (a) China adopts much greater reciprocity in its economic engagement with the advanced countries despite its status as a developing country under WTO rules; and (b) the United States stops equating geo-strategic competition with economic competition, recognizes that economic dynamism and economic resilience comes from strengthening indigenous innovation capability rather than from holding China back technologically, and institutes social programs to significantly reduce the trauma that is created by frequent job changes. Deep reform of the WTO is urgently needed but is unlikely to happen in the medium run. For the medium run, the United States should mobilize country cooperation in regional settings (like the Trans-Pacific Partnership [TPP]) to introduce policy innovations to serve as templates for a re-designed WTO architecture, and to harness collective market power to be used in future negotiations on WTO reform.

This paper examines how changes in China's trade environment contributed to the rise in private firm exports. Data from 1997 to 2009 reveal that both increased exposure to multinational firm exports in related industries and expansion in private firm imports at the broad industry level contributed to private firm export growth. The benefits of multinational exposure are particularly strong for consumer goods, and the benefits of private firm provincial imports are most strongly linked to private firm exports of capital goods and intermediate inputs. In contrast, special economic zones and technology zones did not increase private firm exports. Further investigation of the export transaction data at the product level suggest that Chinese private firm export capability was increased by (1) improvements in product quality that was fostered by proximity to multinational firms; and (2) improved access to imported intermediate inputs.