Kim Ruhl: Trade War and Peace: US-China Trade and Tariff Risk from 2015–2050

We use U.S. import dynamics and a dynamic exporting model to estimate how expectations about U.S. tariffs on China have changed around the U.S.-China trade war. We find (i) there was no increase in the likelihood of a trade war before 2018; (ii) the trade war was initially expected to end quickly, but its expected duration grew substantially after 2020; and (iii) the trade war reduced the likelihood that China would face Non-normal Trade Relations tariffs in the future. Our findings imply that the expected mean future U.S. tariff on China rose more under President Biden than under President Trump.

Kim Ruhl is the Curt and Sue Culver Professor of Economics at the University of Wisconsin, where he is the co-director of the Center for Research on the Wisconsin Economy. His research focuses on international economics, models of firm heterogeneity and national income accounting.  He holds a B.S. in economics from Bowling Green State University and a Ph.D. in economics from the University of Minnesota. He is also a research associate at the National Bureau of Economic Research and a special sworn researcher at the U.S. Bureau of Economic Analysis, where he studies the ways that multinational firms produce and sell goods and services around the world.