A Study on the Asymmetric Effects of Import Tariffs on the Global Value Chains of Both Trading Partners

Abstract

This study examines how import tariffs generate asymmetric effects across the global value chains (GVCs) connecting two trading partners. It develops a conceptual framework that distinguishes three dimensions of asymmetry: stage differences across upstream raw-material supply, midstream manufacturing, and downstream sales and brand operations; actor differences arising from technological capability, industrial structure, and economic scale; and measurement differences caused by changes in forward and backward GVC participation. The study employs a narrative literature review, theoretical mechanism analysis, and an interpretive case study of the China–US tariff conflict. The case evidence is used to illustrate the proposed mechanisms rather than to establish causal effects. The analysis suggests that tariff shocks are transmitted through higher input costs, changes in sourcing and production locations, reduced market access, supplier substitution, and the redistribution of adjustment costs among exporters, importers, producers, and consumers. Technological capability influences the capacity to capture value added, industrial structure shapes exposure and adjustment pathways, and economic scale moderates shock absorption through market and bargaining power. The study further explains the mechanism of tariff-induced “false upgrading.” Tariffs on imported intermediate inputs may reduce backward GVC participation and mechanically increase a country’s GVC position index, even when its technological capability, export complexity, value added per unit of export, or overall GVC participation does not improve. Consequently, a higher position index should not be interpreted independently as evidence of genuine industrial upgrading. The framework highlights the importance of evaluating tariff effects through multiple indicators and considering the unequal adjustment capacities of trading partners. Future research should test these propositions using inter-country input–output data, firm-level evidence, and causal empirical methods.