KDI Journal of Economic Policy

Korea Development Institute (한국개발연구원)
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Trump Tariffs and Roundabout Trade

  • TADASHI ITO (Faculty of International Social Sciences, Gakushuin University)
  • Received : 2024.06.10
  • Published : 2024.08.31
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Abstract

Although there are many news articles of tariff dodging via the rerouting of made-in-China goods through third countries, relabeling these goods as made in Mexico or made in Vietnam, there have been no scientific studies on this issue. This paper provides statistical evidence regarding whether such practices are taking place. Using monthly trade statistics at the most disaggregated level and analyzing data up to 2019, the year before the COVID-19 shock, little evidence of roundabout trade is found. With an extended dataset up to 2023, overall there is little sign of roundabout trade, although some slight signs of roundabout trade are found for Mexico and Vietnam.

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Acknowledgement

This research was conducted as a part of a project by the Economic Research Institute for ASEAN and East Asia (ERIA) entitled 'The Rise of Global Economic Uncertainty and Firm Behaviour'. Part of the work in this paper was financially supported by the Japan Society for the Promotion of Science KAKENHI (Grant number 20H01501, 22H00063). The author appreciates the excellent research assistance of Takahide Aoyagi. The author is also deeply indebted to the members of this project for their invaluable suggestions. The opinions expressed in this paper are solely those of the author and do not reflect the views of ERIA.

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