Open Access Journal Article

Are Trade Agreements Effective Buffers in Trade Wars?

by Kaoru Ishiguro a,*
a
Graduate School of Economics, Kobe University, Kobe, Japan
*
Author to whom correspondence should be addressed.
JEA  2025 4(2):106; https://doi.org/10.58567/jea04020009
Received: 23 October 2024 / Accepted: 9 March 2025 / Published Online: 21 March 2025
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Abstract

We theoretically examine whether a US-Japan trade agreement would be effective as a buffer against the US-China trade war. There are two ways to mitigate the negative impacts of US protectionism: a “domestic pressure effect to suppress external pressure” and a “free trade agreement (FTA) effect. The former is an effect arising from Japanese protectionist political pressure to suppress the negative impacts of US tariff increases on Japan's political support function. The latter is an effect of the Japan-US free trade agreement. In the absence of a US–Japan trade agreement, both Japan and China’s political support functions decrease when the US raises tariffs. By contrast, when an FTA is agreed between Japan and the US, an increase in US tariffs causes the Chinese political support function to decrease, while the Japanese political support function increases. The US–Japan trade agreement thus plays an effective role as a buffer in mitigating the negative impacts of the US–China trade war on Japan.

Keywords: Trade War; Trade Agreement; Political Support Function; FTA Effect; Domestic Pressure Effect;
Copyright: © 2025 by Ishiguro. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
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APA Style
Ishiguro, K. (2025). Are Trade Agreements Effective Buffers in Trade Wars?. Journal of Economic Analysis, 4(2), 106. doi:10.58567/jea04020009
ACS Style
Ishiguro, K. Are Trade Agreements Effective Buffers in Trade Wars?. Journal of Economic Analysis, 2025, 4, 106. doi:10.58567/jea04020009
AMA Style
Ishiguro K. Are Trade Agreements Effective Buffers in Trade Wars?. Journal of Economic Analysis; 2025, 4(2):106. doi:10.58567/jea04020009
Chicago/Turabian Style
Ishiguro, Kaoru 2025. "Are Trade Agreements Effective Buffers in Trade Wars?" Journal of Economic Analysis 4, no.2:106. doi:10.58567/jea04020009

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ACS Style
Ishiguro, K. Are Trade Agreements Effective Buffers in Trade Wars?. Journal of Economic Analysis, 2025, 4, 106. doi:10.58567/jea04020009
AMA Style
Ishiguro K. Are Trade Agreements Effective Buffers in Trade Wars?. Journal of Economic Analysis; 2025, 4(2):106. doi:10.58567/jea04020009
Chicago/Turabian Style
Ishiguro, Kaoru 2025. "Are Trade Agreements Effective Buffers in Trade Wars?" Journal of Economic Analysis 4, no.2:106. doi:10.58567/jea04020009
APA style
Ishiguro, K. (2025). Are Trade Agreements Effective Buffers in Trade Wars?. Journal of Economic Analysis, 4(2), 106. doi:10.58567/jea04020009

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