The Impact of Trade Conflict on Developing Asia

This paper analyzes the effects of the current trade conflict on developing Asia using the Asian Development Bank's Multiregional Input–Output Table (MRIOT), allowing us to calculate the impact on individual countries and on sectors within countries. The analysis estimates the direct impact o...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Abiad, Abdul, Baris, Kristina, John Arvin Bernabe, Bertulfo, Donald Jay, Camingue-Romance, Shiela, Feliciano, Paul Neilmer, Mahinthan, Joseph Mariasingham, Mercer-Blackman, Valerie
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2018
Subjects
International markets
Trade disputes
United States > US
Asia
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Summary:This paper analyzes the effects of the current trade conflict on developing Asia using the Asian Development Bank's Multiregional Input–Output Table (MRIOT), allowing us to calculate the impact on individual countries and on sectors within countries. The analysis estimates the direct impact on all tariff-affected goods; uses input–output analysis to estimate indirect effects on gross domestic product (GDP), exports, and employment; and allows for redirection of trade toward other producers using the approach of Feenstra and Sasahara (2017). A full escalation of the bilateral United States (US)–People's Republic of China (PRC) trade conflict would shave 1% off PRC GDP and 0.2% off US GDP. The rest of developing Asia could see small net gains thanks to trade redirection, particularly in the electronics sector. A trade war in autos and parts would hurt the European Union and Japan. The conflict has substantial negative effects on PRC and US employment, but only minor impacts on current account balances.