Recently, the co-authored paper Pains or Gains: Trade War, Trade Deficit, and Tariff Evasion by Professor Zhang Yan, Chair of the Department of Macroeconomics at our School, was published online in Journal of International Economics, an international Class I economics journal.
Abstract
This paper reveals that the reduction in the US-China trade deficit during the trade war obscured reporting discrepancies in US imports of Chinese products due to tariff evasion. We empirically examine the effect of the US-China trade war on tariff evasion in US imports of Chinese goods and provide direct evidence that market demand of entry states contributes significantly to tariff evasion. Using the input-output table, we find that a one standard deviation increase in local demand causes a 1.312-fold rise in tariff evasion for affected products post–trade war. This effect mainly works through intermediate goods, and its impact grows as importers' tariff liabilities increase. Further analysis considering local social environments shows that voters' attitudes toward trade protection and the development of labor unions play crucial roles in mediating the influence of market demand on tariff evasion.
Author Biography
Zhang Yan is the Chair and Professor of the Department of Macroeconomics at the School of Economics, Shanghai University of Finance and Economics. Her main research areas are international economics and China's economic issues. To date, she has published more than 20 papers in renowned domestic and international economics journals such as Journal of International Economics, Journal of Comparative Economics, Canadian Journal of Economics, and China Economic Quarterly. She has presided over and completed multiple projects, including projects funded by the National Natural Science Foundation of China and provincial- and ministerial-level projects. She has won the An Zijie International Trade Research Award and the Shanghai Philosophy and Social Sciences Outstanding Achievement Award.
