Examining Trade Friction from the Perspective of Global Value Chains: Experience from the United States and China Trade Friction

This article analyses shifts in trade gains, global value chain (GVC) linkages and GVC positions between the United States and China during 2000–2014, utilising the latest data from the World Input–Output Database (WIOD). The aim is to examine certain characteristics and dynamics that may offer perspectives on understanding the context of US–China trade friction. Focusing on manufacturing sectors—particularly electromechanical equipment, audiovisual products and related spare parts—we employ domestic value-added and vertical specialisation (VS) metrics to shed light on the context in which these industries have become focal points in US trade disputes. The findings highlight a relative decline in the United States’ competitive advantage compared to China in terms of trade gains and GVC positioning. Additionally, the US trade friction targeting manufacturing industries appears associated with China’s increasing export profitability and VS. Moreover, the results of the Granger causality test indicate statistical associations between the share of Chinese participation in US value-added exports and US–China trade friction, though such associations should not be interpreted as strict causal evidence. This analysis provides empirical observations on structural aspects of bilateral trade relations, offering background perspectives to inform understanding of trade tensions and highlighting how GVC dynamics may relate to contemporary trade policy contexts. JEL Codes: F14, F51