The Sino-US Trade Cost Transmission Mechanism and Corporate Response Strategies under the Background of Escalating Trade Protectionism

Xiaotong Lin

doi:10.54691/c1hyhb74

Authors

Xiaotong Lin

DOI:

https://doi.org/10.54691/c1hyhb74

Keywords:

Trade Protectionism, China-US Trade, Cost Transmission Mechanism, Corporate Response Strategy.

Abstract

Since 2018, the U.S.-China trade conflict has intensified, with the U.S. increasing tariffs, imposing technological blockades, and restructuring supply chains. This new approach extends beyond traditional tariffs to include technical specifications and industrial chain reorganization, affecting companies' cost management and strategic decisions. However, current research has not thoroughly investigated the driving factors and corporate responses related to trade costs. This study develops a "policy-cost-enterprise-market" model to reveal the impacts of policy changes, supply chain adjustments, and market feedback while analyzing cost pressure and response strategies among businesses of varying industries and sizes. This study shows that trade protectionism has escalated due to economic competition, political rivalry, and strategic limitations, with new diversification characteristics, broad application, and long-term effects. It proposes a four-dimensional framework for corporate response strategies: reduce reliance on a single resource through market diversification, bolster supply chain resilience and cost-sharing, tackle technical barriers with innovation, and mitigate regulatory risks through compliance management and policy negotiation. This study offers insights into the effects of increased trade protectionism and provides recommendations for companies in the Sino-U.S. trade chain to develop effective response strategies.

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