Environmental and Economic Impacts of Trade Barriers: The example of China–US Trade Friction

Abstract The anti-globalisation movement could simultaneously affect the worldwide distribution pattern of the economy and environmental emissions. However, most existing studies have focused on economic impacts, and relevant research on environmental effects are contextualised by trade liberalisation. Using a global computable general equilibrium model and taking the recent anti-trade policies of the Trump administration as an example, this study investigates the possible socio-economic and environmental effects of trade friction. Specifically, this study explores how the implemented six rounds of China–US trade friction and its different long-term development trends affects regional economic output, GHG emissions and air pollutants. Results show that trade barriers harm both countries’ economies and such losses have a certain permanence, while non-participants can benefit indirectly. However, trade friction can reduce participants’ emissions, change global GHG emission distribution patterns, and decrease the emission intensity of global carbon dioxide and some pollutants. However, the change in trade patterns is not conducive to clean energy development in the less-developed regions, including the Middle East, Africa, and Latin America, and emission reductions from trade friction are insufficient to avoid catastrophic climate change.