Research on the Economic Effects of China-U.S. Trade Friction and VAT Reduction

• 1、Economics and Trade School, Hunan University, Changsha 410000

Abstract：The trade friction between China and the United States will inevitably have a huge impact on the Chinese economy. This paper uses a dynamic CGE model to analyze and analyze the economic effects of the dynamic evolution of trade friction between China and the United States, and evaluate the policy effects of VAT reduction. The simulation results show that the negative impact of the trade friction between China and the United States on the Chinese economy will reach its maximum in 2020, and it may lead to a low-end lock-in of China\'s industrial structure. The tax reduction policy can guarantee the realization of the goal of "stabilizing employment and investment", but it has no significant effect on "stabilizing foreign trade". As key industry sectors are more sensitive to the negative impact of trade friction, China should pay more attention to investment guidance based on inclusive tax reduction policies to achieve long-term stable economic development.

Keywords： World Economics China-US Trade Frictions Tax Reduction Policies Computable General Equilibrium Model