Winners and losers of the Sino-US trade war from economic and environmental perspectives

Abstract

The ongoing trade war between the United States and China is having profound impacts on the global economy. As recent studies have found substantial amounts of carbon dioxide and air pollution embedded in the global supply chains, the Sino-US trade war may also affect emissions and health burdens worldwide, which remains poorly understood. Here, we estimate the potential changes in gross domestic product (GDP), anthropogenic emissions and particulate matter (PM2.5) related premature deaths worldwide under two Sino-US trade war scenarios. We find that for the US and China, the trade war would reduce their GDP and, less significantly, emissions and mortality, suggesting that the trade war is not an effective means of environmental protection. The trade war would increase both GDP and mortality in many developing regions, because of their increased production of goods targeted in the Sino-US trade war. Surprisingly, Western Europe and Latin America and Caribbean would have higher GDP but lower emissions and mortality, an economic and environmental win-win outcome as a net result of the complex changes in the global supply chains. Neighbour regions of the US and China such as Canada, Japan and Korea would also have higher GDP but lower mortality, because of reduced atmospheric transboundary transport from the US and China overcompensating for increased local emissions of these neighbours. The complex consequences of the Sino-US trade war highlight the strong inter-regional and economic-environmental linkage in support of a global collaborative strategy to foster economic growth and environmental protection.