Topic: Trade War and Technology Rivalry

Date: December 10, 2025 (Wednesday)

Time: 14:30 - 16:00

Venue: T1-302-R1

Language: English

Abstract：

We develop a dynamic quantitative trade model featuring endogenous innovation and trade-driven technology diffusion. In the model, tariffs shape global technological progress by (i) altering knowledge flows embodied in trade and (ii) changing market sizes and thus innovation incentives. We estimate the model’s key parameter---the elasticity of international knowledge diffusion, proxied by patent citations, with respect to trade flows---using quasi-experimental shocks to global trade patterns. With the estimated model in hand, we quantify the effects of recent trade wars and show that endogenous innovation and trade-driven technology diffusion substantially amplify the technological and welfare losses from rising trade barriers. Finally, we characterize the unilaterally optimal U.S. tariffs on China, highlighting a trade-off between limiting China's technological advance and fostering U.S. innovation.

About the Speaker:

Dr. Wang is an Associate Professor at the School of Business, Hong Kong Baptist University. He received his Ph.D. in Economics from Pennsylvania State University and his M.A. and B.A. in Economics from Peking University. He currently serves as Vice President of the China Trade Research Group (CTRG). His research has been published in leading international journals such as Review of Economics and Statistics, Journal of International Economics, Journal of Monetary Economics, and Journal of International Money and Finance. His work was recognized with the 2024 PuShan Policy Research Excellent Paper Award. His research interests include international trade, multinational production, and the Chinese economy.