Reports
Discussion Papers
No.870 Tariff Pass-through: The Case of China’s WTO Accession
by Mi DAI
October 2022
ABSTRACT
Recent studies on the China–US trade war reveal complete tariff pass-through into import prices for both China and the US. This study provides additional evidence of tariff pass-through in China. Using firm-level monthly trade transaction data, we estimate the tariff pass-through for Chinese imports during the World Trade Organization (WTO) accession period from 2000 to 2006. Consistent with evidence during the trade war, tariff pass-through is also complete for tariff reductions induced by WTO accession. Structural estimates of supply elasticity also imply complete tariff pass-through. These results are robust across ownership types and product end-use. Surprisingly, no correlation exists between tariff pass-through and China’s market share in global imports. Even for products where China accounts for more than 30% of global imports, we still find a complete pass-through of tariffs into import prices.
Keywords: Tariff, Pass-through, WTO accession
JEL classification: F13, F14
PDF available at http://hdl.handle.net/2344/00053511
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