Blocking China, benefiting Asia? The export substitution effects of US trade remedy escalation on South Korea, Taiwan, and Japan

Abstract

Purpose This paper examines whether United States’ antidumping (AD) and countervailing duty (CVD) measures imposed on Chinese exports generate export substitution opportunities for South Korea, Taiwan, and Japan in the US import market, and identifies the sectoral and structural conditions – technological intensity, global value chain (GVC) positioning, and Chinese circumvention behaviour – that amplify or attenuate these competitive gains. Design/methodology/approach Using USITC active AD/CVD order records, UN Comtrade HS 4-digit bilateral trade data, and World Bank macroeconomic controls for 2000–2023, the study employs Poisson pseudo-maximum likelihood structural gravity models, staggered difference-in-differences estimation, dynamic event-study specifications, and instrumental-variable corrections for policy endogeneity across approximately 142,000 exporter–product–year observations. Findings US trade remedy orders against China increase pooled exports from Korea, Taiwan, and Japan to the US by approximately 22∼23 percent in affected product categories. Taiwan benefits most in electronics and semiconductors; Korea in semiconductors, clean energy; Japan in precision machinery. Gains are attenuated by high circumvention exposure and deep backward GVC dependence on Chinese intermediate inputs. Originality/value This is the first comprehensive product-level study simultaneously examining all three East Asian economies across the full US AD/CVD order universe through 2023, extending Bown and Crowley (2007) trade deflection framework to a new directional export-substitution mechanism and incorporating China's circumvention behaviour as an endogenous moderating channel.

The authors' abstract, as published at the source. Journal of Economic Studies, 2026 · DOI ↗