Trade diversion and labor market adjustment: Vietnam and the U.S.-China trade war

European Economic Review 2026 Open access

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Authors: Karin Mayr-Dorn, Gaia Narciso, Duc Anh Dang, Hien Phan
DOI: 10.1016/j.euroecorev.2026.105282
Cited by: 1
References: 41

Abstract

This paper investigates the effects of the U.S.-China trade war on labor market outcomes in a third country, Vietnam. We exploit variation in the extent of U.S. tariff hikes on Chinese imports across industries as well as pre-existing industry employment patterns in Vietnam. We find that Vietnamese individuals and districts that are more exposed to the trade war experience higher employment and lower informal employment in traded industries. Our findings reveal that bilateral trade policy can substantially affect labor markets in third countries.

Fields of Study & Subjects

Global trade and economics Global trade sustainability and social impact Regional Economics and Spatial Analysis

Publication details

Journal / source
European Economic Review
Publisher
Elsevier BV
Volume
185
Pages
105282–105282
Publication date
21 February 2026
Language
EN