Tariff pass-through: The case of china's WTO accession

Recent studies on the China–US trade war surprisingly find complete tariff pass-through into import prices for both China and the United States. This paper provides additional evidence of tariff pass-through in China. Using firm-level monthly trade transaction data, we estimate the tariff pass-through for Chinese imports in the period of WTO accession during 2000–2006. Consistent with evidence during the trade war, tariff pass-through is also complete for tariff reductions induced by the WTO accession. Structural estimates of export supply elasticity also imply complete tariff pass-through. Additionally, we find the complete pass-through result holds regardless of firm ownership types, product end-use, or China's market share in world imports.