Chinese Steel Response to Tariffs (original) (raw)

SSRN Electronic Journal, 2022

Abstract

This paper investigates the impact of trade protection on Chinese steel prices. The paper sheds light on the relatively new Chinese steel futures market for concrete reinforcing bar (rebar), which has quickly become the most highly traded metal future in the world and yet has received very little attention in the academic literature. Moreover, the paper contributes to the existing literature on the consequences of trade protection by observing the behaviors of both spot and futures markets in response to trade measures. How do Chinese steel spot and futures markets react to President Trump’s Section 232 tariffs, as well as those implemented by policymakers in other countries? Our empirical results indicate that Chinese futures prices respond negatively to foreign trade protection, while spot prices exhibit little response to the implementation of foreign duties. We also find that equity prices of large Chinese steel firms decline in response to duties. Finally, our results indicate ...

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