Bloomberg article cites research by Yang Zhou

In a January 11 article, Bloomberg News looked at "How China Won Trump’s Trade War and Got Americans to Foot the Bill." In citing research by graduate student Yang Zhou, the article noted:

China grew at or above 6% in both 2018 and 2019, with tariffs costing it about 0.3% of GDP over those years, according to Yang Zhou, an economist at the University of Minnesota. By her estimate, the trade war cost the U.S. 0.08% GDP over the same period. The clearest winner was Vietnam, where the tariffs boosted GDP by nearly 0.2 percentage point as companies relocated.

Zhou's dissertation examines the U.S.-China trade war through linkages in global value chains. As she explains in her paper's introduction, globalization enables countries to specialize in producing at different stages of a final good. For example, an iPhone is designed in the U.S., with its parts made in Japan and finally assembled in China. This fragmentation across national borders inevitably amplifies the impacts of international trade policies.

When the U.S. increased tariffs on imports from China in 2019, the entire process can be divided into two rounds, with the first round mainly targeting intermediate goods and the second round including more consumption goods. Zhou develops a model to examine both rounds of tariffs, as well as two types of linkages in global value chains: the internal linkage within each industry and the external linkage across different industries.

Zhou is currently on the job market and will complete her doctoral studies this spring.