The impact of the US-China trade war on China's vehicle and vehicle chip industry

Abstract

On 22 March 2018, US President Donald Trump signed a presidential memorandum on the 301- investigation, which will impose 25% tariff on specific Chinese goods. The trade war between China and the US officially started and during this time, several US measures influence China's vehicle industry and vehicle chip industry. This paper selects the China auto industry indexes, China Auto chip indexes and US dollar exchange rates from 6 months before the trade war to 24 January 2020.This paper uses VAR and ARMA-GARCH models to model and analyses the data, to study how the Chinese vehicle industry and vehicle chip industry have been affected by the US-China trade war, and to predict the future development of the Chinese vehicle industry and vehicle chip industry. This paper also suggests that in the current chip war between China and the United States, China can strengthen its technological development, strengthen trade exchanges with technological powers, and enhance exchanges with the United States to gain benefits.