How do Firms Respond to Long-term Political Tensions? Evidence from Chinese Food Importers

Political and economic tensions, which often jeopardize trade, are rising among the world’s major powers, and countries like China are more frequently using food-related trade actions to deal with deteriorating political relations. Previous literature largely focuses on how brief, short-lived political tensions affect bilateral trade; however, little is known about firm-level trade responses to long-termpolitical tensions. This paper investigates how importers respond to long-term political tensions by examining the six-year Norway-China political tensions that ended in 2016. In particular, we use an event study approach to examine China’s seafood importers’ responses to China’s 2010 sanction on Norwegian fresh salmon imports after Norway awarded Liu Xiaobo, a Chinese political dissident, a Nobel Peace Prize. Our results reveal firm-level responses at both the extensive and intensive margins. At the intensive margin, firms that imported Norwegian fresh salmon before the sanction saw a 20% persistent decline in their fresh salmon import value and an 80% decrease in import share of Norwegian fresh salmon products over our study period. At the extensive margin, we not only find a trade diversion effect on firms importing from other countries and less firms importing fresh salmon from Norway, but also a permanent political hedging effect with a 20% decline in the maximum import share from any particular country, even if not Norway. We also provide evidence of persistent sanction effects even after China-Norway relations unfroze. Our findings emphasize the need to consider the long-term sanction consequences in foreign policy using food-related trade sanctions

The U.S.-China trade war: Tariff data and general equilibrium analysis

The current trade war between the United States and China is unprecedented in modern history. This study introduces a database of tariff increases resulting from the recent trade war and quantifies the impacts using the canonical GTAPinGAMS model calibrated to the recently released GTAP version 10 accounts. We find that the tariff increases as of September 2019 decrease welfare in China by 1.9% and welfare in the U.S. by 0.3%. Impacts on sectoral revenue are reported for both countries. China’s exports to and imports from the United States are reduced by 58.3% and 50.7%. Most of the reductions in bilateral trade are absorbed by trade diversion to other countries. The welfare and U.S.-China bilateral trade impacts are exacerbated by additional tariffs threatened by the United States and corresponding retaliations from China. Sensitivity analysis is conducted by increasing and decreasing import substitution (Armington) elasticities by two standard deviations. This has modest impacts on welfare and trade flow results

Can China’s Rural Land Policy Reforms Solve its Farmland Dilemma?

THE SCARCITY of arable land is a deβining feature of Chinese agriculture (Zhang and Li 2018). In 2015, China fed 18.9 percent of the world’s population with only 8.5 percent of the world’s arable land. Furthermore, the limited agricultural land resource in China is distributed to 231 million households, resulting in an average farm size of only 0.96 acres per household (China Agricultural Development Report 2016), and even such small farms are usually scattered in several separate plots. Therefore, China faces two challenges: ( a ) preserving the quantity and quality of its arable land amid rapid urbanization; and, ( b ) consolidating land to increase agricultural productivity. China’s recent rural land reforms on these two aspects have implications not only for China, but the entire world

What Can We Learn about U.S.-China Trade Disputes from China’s Past Trade Retaliations?

As of the writing of this article, trade issues are brewing between the United States and China. At the beginning of 2018, the United States imposed tariffs on imported solar panels and washing machines, and China responded by initiating an anti-dumping investigation into U.S . sorghum. On March 8th, President Trump announced steel and aluminum tariffs with China being one of the primary targets. The tariffs affect $2.8 billion worth of Chinese imports, based onCensus USA Trade Data. Within two weeks, China responded by announcing a list of 128 U.S. products that are the targets of retaliatory tariffs and of about$3 billion trade value (The Chinese Ministry of Commerce, 2018).1 The list notably included pork products and ethanol, which are of critical importance to the U.S . Midwest. China’s announcement came right after President Trump’s proposal of further tariffs on up to $60 billion worth of Chinese imports, investment restrictions, student visa restrictions, and bringing disputes over China’s trade practices to attention of the World Trade Organization (WTO) (Rueters, 2018; Wall Street Journal, 2018)

Lessons from Previous U.S.-China Trade Disputes

TRADE ISSUES have recently erupted between the United States and China and the battle over newly announced tariffs has escalated quickly. At the beginning of 2018, the United States imposed tariffs on imported solar panels and washing machines, and China responded by initiating an anti-dumping investigation into US sorghum. In early March, President Trump announced steel and aluminum tariffs with China being one of the primary targets. Within two weeks, China responded by announcing a list of 128 US products that are the targets of retaliatory tariffs effective on April 2, 2018. The list included pork products and ethanol, which are of critical importance to the US Midwest. As those tariffs went into effect, the US Trade Representative announced 25 percent tariffs on $50 billion worth of Chinese imports, along with investment restrictions, and the submission of a case to the World Trade Organization (WTO) over China’s trade practices Lessons from Previous U.S.-China Trade Disputes (Trump 2018; United States Trade Representative 2018). The Chinese government responded immediately with its own tariff package, targeting roughly$50 billion of US imports, including the largest agricultural import, soybeans. For both the United States and China, the $50 billion tariffs are scheduled to take effect in a couple of months. The volleying may continue as President Trump has mentioned the possibility of another round of proposed tariffs on a list of Chinese imports with$100 billion in value (Davis 2018)

China’s Agricultural Import Potential

As part of the current trade negotiations between the United States and China, China has suggested that it may lower trade barriers and increase agricultural imports from the United States. In this policy brief, we provide an overview of China’s tariff and non-tariff trade barriers and estimate China’s import potential if these barriers are removed. We find that China’s importation of major U.S. commodities has the potential to increase significantly. For example, in our medium-growth scenario, China will potentially increase U.S. pork import value by $8.9 billion if all trade barriers are removed

Partial regularity of solutions to the 3D chemotaxis-Navier-Stokes equations at the first blow-up time

In this note, we investigate partial regularity of weak solutions of the three dimensional chemotaxis-Navier-Stokes equations, and obtain the $\frac53$-dimensional Hausdorff measure of the possible singular set is vanishing at the first blow-up time. The new ingredients are to establish certain type of local energy inequality and deal with the non-scaling invariant quantity of $n\ln n$, which seems to be the first description for the singular set of weak solutions of the chemotaxis-fluid model, which is motivated by Caffarelli-Kohn-Nirenberg's partial regularity theory \cite{CKN}