By He Jianwu & Hou Yongzhi, Research Department of Development Strategy and Regional Economy, DRC；Tang Zedi & Pan Chen, Tsinghua University

Research Report, No.184, 2019 (Total 5684)

2019-10-18

Abstract: Since 2018 when the U.S. provoked trade disputes, the economic and trade frictions between China and the U.S. have become gradually intensified and escalated. What’s more, the U.S. is preparing a new tariff measure. With things as such, the impact of the trade frictions between China and the U.S. needs to be further assessed. Currently, various regions at home have become integrated with the global division of labor system, and the economic relations between different regions have become increasingly close. It is necessary to analyze the impact of the US increased tariffs on domestic regions from the perspective of global division of labor. Research findings show that the impacts of the US tariff increase on the economic aggregate and employment opportunities in various regions are distinctively different. The impact in the eastern region could be directly felt, while the impacts on central and western regions are relatively indirect. Moreover, the US implementation of the increased tariffs worth 300 billion dollars has a greater negative impact on the GDP and employment conditions of various regions in China. Therefore, we need to coordinate resources of various regions, regulate and guide local governments to set up funds for industrial transformation in order to cope with trade conflicts, provide support to those regions and enterprises facing difficulties in the short term and encourage them to accelerate industrial transformation. The Belt and Road Initiative needs to be pushed ahead to strengthen sub-regional cooperation. We need to facilitate the nationwide coordination for the advance of social security system, and ensure the basic needs for those who might be laid off during enterprise’ transformation.

Key words: impose additional tariffs, domestic regions, economic aggregate, employment demand