Study On The Effects Of The Carbon Tariff In Us-china Trade

Recently the global warming has been concerned with the global living and development,thus how to reduce and control the carbon emissions is becoming one of the hot issues. It willlargely influence the trade between China and United States if the United States imposes thecarbon tariff on the goods imported from China under the background of low-carbon economy.This paper tries to make research on the effects of the carbon tariff and the trade between Chinaand the United States in the following aspects. Firstly, we use the input-output method tocalculate the embodied carbon in the goods exported from China to the United States. On thebasis of the results we estimate the tariff from various industries in different carbon tariff rates.Secondly, we analysis the effects on the carbon tariff and the trade between China and the UnitedStates in microeconomic level, which include the production, consumption, the trade terms, andso on. And then with the Game Theory we discuss the actions China government will take in thenegotiation with the United States government in future. The results show that the goodsexported China to the United States which embodied high carbon emissions concentrate on thechemistry, the metal products, the mechanical equipment and transportation equipment industries.If the United States imposes the carbon tariff on these goods, it will reduce the trade amountsharply and the welfare loss for China, meanwhile the United States probably improves itswelfare. Thus China will be in a worse situation in the global trade. In Game Theory in order toprotect our domestic benefits, China government possibly take the retaliation strategy to copewith the carbon tariff, however, it will results the game infinitely. Lastly some suggestions willbe proposed.