The Impact of the U.S.-China Trade War on Air and Ocean Shipments

This paper estimates the impact of the U.S.-China trade war and the consequent increase in trade costs on air and ocean shipments between the two countries. Using panel data covering U.S. exports and imports with trading partners from 2016 to 2021, we estimate gravity models and find evidence showing negative impacts of the trade war on both U.S. imports from China and U.S. exports to China. However, there are differential impacts on air shipments and ocean shipments. Specifically, we find tariff increases by the U.S. on Chinese goods primarily had a negative impact on air imports from China, whereas the counter tariffs from China on U.S. goods primarily had a negative impact on U.S. ocean exports. These findings add to the evidence about the effects from the U.S.-China trade war, particularly the differential impact of the trade war on the transportation modes fueling the U.S.-China trade relationship.