Recently, the Issue 7, 2026 of Economic Research Journal features the paper “Countering Frictions through Opening‑up: Consumer Welfare Effects of Asymmetric Tariff Adjustments”. The authors are Professor Dai Mi from Beijing Normal University Business School (BNUBS), Chen Junyan, a 2023‑year PhD candidate in World Economics, and Associate Professor Song Ze from the School of Economics, Nankai University.

Abstract

Between 2017 and 2019, in response to U.S. tariff hikes against China, China imposed retaliatory tariffs on U.S. imports while voluntarily cutting import tariffs applicable to other trading partners. Drawing upon a non‑homothetic nested CES (Constant Elasticity of Substitution) demand system encompassing final goods and intermediate inputs, this paper integrates granular household consumption expenditure data, trade statistics and tariff records to quantitatively evaluate the aggregate welfare impact and distributional consequences of such asymmetric tariff adjustments for urban Chinese households.

The study yields four key findings. First, retaliatory tariffs targeting the United States generate modest and manageable consumer‑welfare losses for individual households, equivalent to roughly 0.11 % of household expenditure. Second, tariff reductions vis‑à‑vis third‑country trading partners raise average household consumer welfare by 0.08 %, substantially offsetting the adverse impacts of retaliatory tariffs. Third, asymmetric tariff realignment redirects import sourcing away from the United States toward alternative suppliers. Reduced household reliance on U.S. imports further mitigates the welfare‑eroding effects of retaliatory duties. Fourth, regarding distributional outcomes, low‑income households spend a larger share of consumption on tradable goods — notably food and agricultural products most exposed to retaliatory tariffs — so tariff increases exert a slightly heavier burden on disadvantaged groups. By contrast, tariff cuts for other countries produce no significant distributional welfare effects.

From the perspective of household consumer welfare, this paper delivers a quantitative assessment of the economic ramifications of China’s recent trade‑policy shifts. It demonstrates that advancing voluntary opening‑up and diversifying import sources helps cushion domestic economic shocks stemming from China‑U.S. trade frictions.

Paper Citation

Dai Mi, Chen Junyan, Song Ze. Countering Frictions through Opening‑up: Consumer Welfare Effects of Asymmetric Tariff Adjustments. Economic Research Journal, Issue 7, 2026.

Table of contents of the issue: https://mp.weixin.qq.com/s/ZuiXxOWcUEBF_Q_JF4FYGA

About the Authors

Dai Mi

Professor, PhD Supervisor, and Chair of the Department of International Economics and Trade, Beijing Normal University Business School (BNUBS). Recipient of the National High‑level Talent Program. He holds a Doctoral Degree in Economics from Peking University. His research focuses on international trade and development economics.

His works have appeared in leading domestic and international journals including Economic Research Journal, Management World, China Economic Quarterly, The Journal of World Economy, Journal of International Economics, Journal of Development Economics, and Journal of Economic Behavior & Organization.

Professor Dai has received numerous research and teaching honors, such as the Outstanding Achievement Award for Humanities and Social Sciences Research in Higher Education (Ministry of Education), the An Zijie Prize for Outstanding Papers in International Trade, the Pu Shan Prize for Excellent Research in World Economics, the Beijing Municipal Higher Education Teaching Achievement Award, the Pengnian Outstanding Young Faculty Award of Beijing Normal University, and the Tao Dayong Fund Young Scholar Award. He serves as Associate Editor for Journal of International Trade and Asian Economic Journal.

Chen Junyan

PhD candidate (admitted 2023) majoring in World Economics at Beijing Normal University Business School (BNUBS). Her research interests lie in international trade and development economics. Her publications can be found in Economic Research Journal and China Economic Quarterly.

Contributed by Dai Mi

Edited by Sun Yue

Reviewed by Hu Conghui