Rerouting of China’s Wood and Paper Sector Trade in Value Added Under U.S. Tariff Pressures

This paper quantifies the rerouting of China’s wood and paper sector value added to the United States over 2016–2022, a period spanning the imposition of U.S. Section 301 tariffs and subsequent supply-chain reorganization. Using OECD ICIO, a three-term value-added decomposition separates direct bilateral from indirect trilateral flows through third-country transit economies. A structural decomposition analysis attributes changes in the trilateral channel to four factors: value-added intensity, China’s domestic supply-chain structure, China’s intermediate export orientation toward transit economies, and transit-economy global value chain output combined with U.S. final demand. The trilateral channel grew by 125.5% in wood and 159.4% in paper over the study period, substantially exceeding bilateral channel growth. China’s active reorientation of intermediate exports toward transit economies emerged as the dominant supply-side driver. Vietnam, Mexico, and Canada are identified as the principal conduit economies. Value-added RCA consistently exceeded gross-trade RCA in both sectors; in paper, the gap widened throughout the tariff period, indicating that China’s upstream international competitiveness strengthened despite bilateral trade barriers. These findings demonstrate that bilateral tariffs are materially less effective than gross-trade statistics imply. Value-added tracking should accompany gross-trade monitoring in trade policy assessment.