Econometric evaluation of the China–US trade war effects
利用面板数据和因子模型构建反事实贸易模式，评估2018年中美贸易战对两国进出口及贸易平衡的影响，发现中国出口显著下降、贸易顺差减少，美国对华出口意外增加。
The escalating trade war between China and the US, initiated in 2018, has significantly impacted the trade pattern of these two nations. This event can be treated as an intervention which has led to a series of retaliatory actions, resulting in substantial economic and trade frictions between the two largest economies. This paper aims to analyze the economic impacts of the trade war effects using advanced econometric techniques. Our empirical study employs panel data analysis combined with a factor model, inspired by the methodologies of Hsiao, Ching and Wan (2012) and Bai, Li and Ouyang (2014), to construct trade patterns for both China and the US. By using annual trade data from multiple countries as a control group, we construct counterfactual results for China’s and the US’s imports, exports, and trade balance, respectively. Under a nonstationary setting, the counterfactual results indicate a significant decline in China’s exports and a notable reduction in its trade surplus with the US post-2018. Meanwhile, US imports from China decreased, aligning with the trade war’s goal of reducing the trade deficit, while US exports to China unexpectedly increased, possibly influenced by the Phase One trade agreement. We also perform a dynamic permutation test on treatment effects over time, which ensures the rigor and significance of our analysis, reinforcing the reliability of the estimated effects. Finally, we conduct an empirical comparative analysis with alternative methods to demonstrate that our chosen approach is particularly well-suited to the context of this study. • Analyze the economic impacts of the trade war. • Employ panel data analysis combined with a factor model. • Predict counterfactual results for trade volumes. • Conduct a dynamic permutation test on treatment effects over time.