On September 1, 2019, China imposed additional tariffs on ** billion U.S. dollars worth of the U.S. import goods. A trade war between the world's two largest economies was initiated by president Trump in mid-2018 and escalated further throughout 2019.

The Trump administration's unprecedented tariffs are accelerating US-China decoupling, compelling business leaders to rethink strategies after decades of established trade norms.

The US-China trade war created net export opportunities rather than simply shifting trade across destinations. Many “bystander” countries grew their exports of taxed products into the rest of the world (excluding US and China). Country-specific components of tariff elasticities, rather than specialization patterns, drove large cross-country variation in export growth of tariff-exposed products. The elasticities of exports to US-China tariffs identify whether a country’s exports complement or substitute US or China and its supply curve’s slope. Countries that operate along downward-sloping supplies whose exports substitute (complement) US and China are among the larger (smaller) beneficiaries of the trade war.

On April 9, 2025, the U.S. imposed high import tariffs on Chinese goods. Average U.S. tariffs on imports from China reached ***** percent on April 10, 2025. In comparison, import levies on exports from the rest of the world were at around **** percent. In response to increased U.S. tariffs, China imposed retaliatory levies, averaging ***** percent as of April 12, 2025. After trade talks, the U.S. and China agreed to temporarily lower mutual trade barriers, leading to average U.S. tariffs of **** percent and average Chinese tariffs of **** percent on May 14, 2025.

Tariff rate, applied, weighted mean, all products (%) in China was reported at 2.18 % in 2022, according to the World Bank collection of development indicators, compiled from officially recognized sources. China - Tariff rate, applied, weighted mean, all products - actual values, historical data, forecasts and projections were sourced from the World Bank on July of 2025.

According to estimates, if President Trump's proposed tariffs go into effect permanently, the United States' GDP would decrease by 0.4 percent. Of this, 0.3 percent would be from the 25 percent tariff on all imports from Canada and Mexico, while 0.1 percent would be from the 10 percent tariff on all imports from China. As of February 10, China imposed retaliatory tariffs on the United States, with a 15 percent tariff on coal and liquid natural gas, and a 10 percent tariff on other exports, including oil, machinery, and large motor vehicles.

Discover the potential effects of China's new tariffs on US soybean exports, as shipments race against the clock to reach their destination before the additional duties are enforced.

This data package includes the underlying data and files to replicate the calculations, charts, and tables presented in The 2018 US-China Trade Conflict after 40 Years of Special Protection, PIIE Working paper 19-7.

If you use the data, please cite as: Bown, Chad P. (2019). The 2018 US-China Trade Conflict after 40 Years of Special Protection. PIIE Working paper 19-7. Peterson Institute for International Economics.

Tariff rate, applied, simple mean, all products (%) in China was reported at 5.36 % in 2022, according to the World Bank collection of development indicators, compiled from officially recognized sources. China - Tariff rate, applied, simple mean, all products - actual values, historical data, forecasts and projections were sourced from the World Bank on July of 2025.

US Tariff Impact on Market

The US tariff policies have significantly impacted the global trade management market, leading to both opportunities and challenges for businesses. In particular, tariffs on imported goods have increased the complexity of managing cross-border trade, requiring businesses to implement more sophisticated trade management solutions.

As companies face rising costs due to tariffs, the demand for trade management systems that help optimize customs compliance, minimize duties, and streamline logistics has surged. Furthermore, sectors such as manufacturing, retail, and transportation have felt the brunt of these tariffs, with industries directly impacted by increased trade barriers.

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For example, the retail sector has seen a rise in goods costs, ultimately affecting margins. The US tariff impact on sectors like manufacturing and retail is approximately 10-15% as they deal with higher raw material costs and inventory disruptions. Companies now look for more automation and integrated solutions to mitigate these costs and streamline operations.

➤ Economic Impact

The US tariffs have led to an increased cost of imports, pushing businesses to adopt more efficient trade management systems. As tariffs increase, businesses are forced to reevaluate their supply chain strategies, leading to higher operational costs. In the long term, this could prompt global shifts in trade flows.

➤ Geographical Impact

US tariffs have disproportionately affected countries with high trade volumes with the US, especially China, Mexico, and Canada. As tariffs increase, businesses in these regions must adapt to higher costs and potential disruptions. This shift influences regional trade agreements and the movement of goods, altering global trade dynamics.

➤ Business Impact

US tariffs have forced businesses to invest in advanced trade management technologies to mitigate the effects of increased import duties and logistical delays. Companies are now focusing on automation, compliance optimization, and cost-effective solutions to navigate the growing complexities of international trade. Small and medium-sized enterprises face considerable challenges.

In response to President Trump’s escalation of trade relations, China countered by issuing tariffs on over 6,000 products worth over $110 billion in U.S. exports. We explore whether China’s tariffs reflected a strategy to apply counter-pressure by hurting political support for Republicans, assess the strategy’s impact on the 2018 mid-term elections, and examine the mechanism underlying the resulting electoral shift. We find strong evidence that Chinese tariffs systematically targeted U.S. goods whose production is concentrated in Republican-supporting counties, particularly when located in closely contested Congressional districts. This apparent strategy was successful: targeted areas were more likely to turn against Republican candidates. Using data on campaign communications, local search patterns online and an original national survey, we find evidence that voters residing in areas vulnerable to the tariffs were more likely to learn about the trade war, recognize its adverse impact, and assign the Republicans responsibility for the escalating situation.

This data package includes the underlying data and files to replicate the calculations, charts, and tables presented in The US–China trade war and phase one agreement, PIIE Working Paper 21-2.

If you use the data, please cite as: Bown, Chad P. (2021). The US–China trade war and phase one agreement. PIIE Working Paper 21-2. Peterson Institute for International Economics.

In May 2025, *** percent of China's exports to the United States were affected by the U.S. punitive tariffs. On May 14, 2025, the average level of tariffs on Chinese goods announced by U.S. President Donald Trump ranged at **** percent.

Learn how rising US-China trade tariffs are affecting the apparel industry, with brands like Eastside Golf adjusting strategies to mitigate cost increases.

President Trump's ten percent tariffs on imports from China, which went into effect on February 4, 2025, are projected to have negative effects on both the GDP of China and the U.S. However, the effect on China's GDP is expected to be stronger and result in a contraction by 0.16 percent in 2026 and 2027 compared to the baseline scenario. In contrast, the U.S. GDP is only projected to be 0.07 percent lower than in the baseline scenario in 2027. If China retaliates, the negative effects on both countries might be stronger.

With an export share of over 19 percent, the United States had been China's largest trade partner for years, until 2018, when the share fell significantly to 16.7 percent, after the U.S. president, Donald Trump, imposed a 200 percent tariff on goods from China. In 2024, the United States accounted for approximately 14.7 percent of Chinese exports, reaching their lowest level in the last decade.

We measure the tariff shocks by matching the U.S. products of Section 301 Tariffs with China provincial customs export data in 2017, the year before the trade war.First, based on the tariffed product lists released by the Office of the United States Trade Representative (USTR), which specify products at the Harmonized Tariff Schedule (HTS) eight-digit code level, we calculate the proportion of tariffed product categories under each six-digit HTS code. For instance, under the U.S. HTS-6 code 6309.29 (tents of other textile material), the corresponding sub-code includes 6306.29.11 (tents of cotton) and 6306.29.21 (tents made of other materials), with only 6306.29.11 being subject to additional tariffs. Thus, the tariffed rate for HTS code 6309.29 is 50%.Second, since the HTS-6 codes are consistent under the Harmonized System (HS) across countries, we estimate the scale of Chinese export affected by the trade war by multiplying the export data of HS-6 products by the corresponding HTS-6 tariffed rate.Third, we further adjust for provincial differences by dividing each province’s tariff-affected export scale by its total export scale.Fourth, the intensity of tariffs varied across the four rounds of the trade war. In the first three rounds, listed products were subjected to a 25% tariff, whereas the fourth round, while covering nearly all remaining U.S.-bound exports, had a lower tariff rate (7.5%), following the signing of the “Phase One” trade agreement between China and the U.S. in January 2020. To account for these differences, we assign a weight of 0.25 to the first three rounds and a weight of 0.075 to the fourth round. The weighted sum serves as a proxy variable for the provincial exposure of the U.S.-China trade war.

US Tariff Impact on Market

U.S. tariffs on Chinese-made drone components have had a notable impact on the warehouse drones system market. The tariffs have raised the cost of critical drone parts, such as sensors and cameras, which are primarily sourced from China.

As a result, manufacturers in the U.S. have faced higher production costs, which could lead to increased prices for warehouse drones. This price increase may affect the affordability and adoption of drone systems in smaller warehouses or businesses with limited budgets.

To mitigate these impacts, companies are exploring alternative suppliers outside of China or increasing domestic production to reduce reliance on imported components. The U.S. tariff impact is particularly significant for helicopter-type drones and general warehouses, which rely heavily on imported technology. The tariffs are estimated to impact 20-25% of the market, especially in segments that depend on Chinese imports.

US Tariff Impact Percentage for Impacted Sector

The U.S. tariffs are estimated to impact approximately 20-25% of the warehouse drone market, with a particular effect on helicopter-type drones and general warehouses, which heavily rely on imported components.

Sources for US Tariff Impact Data

• Tariff Impact on Drone Parts: U.S. tariffs raise the cost of warehouse drone components.
• Price Increases Due to Tariffs: Increased production costs for warehouse drones in the U.S.
• Shift in Supply Chain: U.S. companies seek alternative suppliers to avoid tariffs.

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Economic Impact

• U.S. tariffs on drone components have led to higher production costs, making warehouse drones more expensive.
• The cost increases may limit adoption in smaller warehouses with constrained budgets.
• Despite the tariff challenges, the market continues to grow due to increasing demand for logistics efficiency.

Geographical Impact

• North America, particularly the U.S., faces higher prices due to tariffs, impacting warehouse drone affordability.
• Asia-Pacific remains largely unaffected by tariffs, continuing to supply affordable components.
• Europe is experiencing moderate impacts but benefits from diversification in its supply chain.

Business Impact

• U.S. drone manufacturers face higher costs, which could reduce pro...

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