Macroeconomic effects on trade tariffs. a case study of the u.s. - china trade war effects on the economy of the united states / ; Prekybos tarifų makroekonominiai efektai. JAV ir Kinijos prekybos karo įtaka Jungtinių Amerikos Valstijų ekonomikai.

The main purpose of this master thesis is to ascertain whether and how the bilateral tariffs imposed between the United States and China in 2018 and 2019 have affected the main economic indicators of the US, such as trade diversion from China, trade balance, welfare, and trade intensity. The Master thesis consists of five main parts: the theoretical analysis, analysis of situation, methodology of the research, results of the empirical research, and conclusions. The thoeretical analysis reviews the macroeconomic implications of trade tariffs and research methods used in other scientific articles while the situation analysis section studies main features of the trade war and economic effects of the COVID-19 pandemic. Based on these findings, the partial equilibrium SMART model is chosen for the research and the Trade war and COVID-19 scenarios are constructed. The performed research reveals that solely due to the trade war with China, in 2020 the US total trade balance will improve by 41,020 million USD (0.21% of real GDP), while 43,777 million USD (0.22% of real GDP) of the US imports will have to be sourced from other countries. The US trade intensity with China and welfare will decline. However, the study has found that the potential economic consequences of COVID-19 will reduce the relative effects of the trade war. The study has revealed that the United States economy will benefit from the trade war. Nevertheless, the US agriculture and automotive sectors will suffer most. The author believes that the outcome of the research is important for policymakers in the US and other countries for identifying the effects that the initiated trade war can have not only for the US economy but for any economy that decides to impose trade tariffs for its trading partners and also for examining whether trade tariffs are optimal. Based on the master thesis, on December 30, 2020 a scientific article was published in the journal „Organizations and Markets in Emerging Economies“ (Vol.11, No.2).