Analysis of Chinese Tariff Impacts on the Sorghum Market under Varying Market Structures

Ethan Sabala, Stephen Devadoss

Research output: Contribution to journalArticlepeer-review

Abstract

Using a theoretical and empirical spatial equilibrium model, we examine the effect of the Chinese 25% tariff on the world sorghum market under various market structures. The effects of the tariff are less pronounced under bilateral monopoly than under perfect competition. Specifically, the reallocations of trade caused by the tariff are lessened as the United States uses its market power to mitigate adverse effects. This reduces the tariff's impacts on prices, production, consumption, and welfare for most countries. However, the calibration revealed that the United States and China do not exert significant market power on the world sorghum market and that international sorghum trade is more accurately represented by perfect competition.

Original languageEnglish
Pages (from-to)145-166
Number of pages22
JournalJournal of Agricultural and Resource Economics
Volume47
Issue number1
DOIs
StatePublished - Jan 2022

Keywords

  • bilateral monopoly
  • spatial equilibrium model

Fingerprint

Dive into the research topics of 'Analysis of Chinese Tariff Impacts on the Sorghum Market under Varying Market Structures'. Together they form a unique fingerprint.

Cite this