Trade War and Peace: U.S.-China Trade and Tariff Risk from 2015–2050

We use U.S. import dynamics and a dynamic exporting model to estimate how expectations about U.S. tariffs on China have changed around the U.S.-China trade war. We find (i) there was no increase in the likelihood of a trade war before 2018; (ii) the trade war was initially expected to end quickly, but its expected duration grew substantially after 2020; and (iii) the trade war reduced the likelihood that China would face Non-normal Trade Relations tariffs in the future. Our findings imply that the expected mean future U.S. tariff on China rose more under President Biden than under President Trump.