The Impact of Trade Conflict on Developing Asia

Abstract

This working paper estimates the effects of tariffs on gross domestic product, exports, and employment across countries and sectors, using the Asian Development Bank’s Multiregional Input–Output Tables. The 2018 trade conflict between the United States and the People’s Republic of China presents a stumbling block to the global manufacturing and international trade that has driven growth and prosperity in Asia. Findings suggest that if all documented threats and retaliations were to be carried out, gross domestic product would fall by around 1% in the People’s Republic of China and by 0.2% in the United States over a period of 2–3 years.