ijamri

International Journal of Advanced Multidisciplinary Research and Innovation
E-ISSN: 3107-6157
📄 RP-20260606-974
The Impact of Protectionism and Trade Policy Uncertainty on Bilateral Trade Flows: Evidence from the United States and China
📚 Volume 2, Issue 3, May-June 2026 | Published on : 08-06-2026
Published
Authors
Abbas Afzal
Abstract
This paper evaluates the role of tariff protection and trade policy uncertainty in influencing U.S. Chinese bilateral trade flows between 1995 to 2023. An Autoregressive Distributed Lag Model was applied to yearly panel data for bilateral trade, U.S. tariffs imposed upon Chinese imports, trade policy uncertainty indexes, U.S. Gross Domestic Product, Brent crude prices and structural control measures regarding China’s World Trade Organization accession and the COVID-19 pandemic. A choice of the ARDL method was reasonable since the included variables exhibited mixed levels of integration and none were classified as being of order 2. The bounds test found a strong presence of a long-run relationship amongst trade, tariffs, uncertainty and the specified control variables. The ARDL estimates indicated that there is a significant long run relationship between U.S. tariffs and bilateral trade such that higher levels of tariffs were associated with decreasing bilateral trade over time. Additionally, the estimated error correction coefficient indicates that a portion of last years’ disequilibrium is corrected in the current year. Finally, the estimation indicates that trade policy uncertainty has a separate effect on bilateral trade beyond what may be explained by changing tariffs. Therefore, this study adds to existing literature by simultaneously modeling the impact of tariffs and uncertainty using a single bilateral time-series approach. Moreover, the findings of this study will complement other evidence related to the incidence of tariffs, uncertainty, and supply chain adjustments.
Keywords
tariffs trade policy uncertainty bilateral trade United States China ARDL Bounds Test Error Correction Model
Publication Details
Research Area
Others
Country
Turkey
Published
June 8, 2026