We examine the indirect effects of the 2018-2019 US-China trade war on Brazil?s labor market. We construct a measure of regional exposure to the trade conflict using industry-specific tariff changes and the sectoral employment distribution across local labor markets. Following higher Brazilian exports to China, our findings reveal that regions more exposed to Chinese retaliatory tariffs on US exports experienced a relative increase in formal employment and wage bills. In contrast, American tariffs on Chinese exports had no significant impact on Brazilian labor markets. These asymmetric responses are consistent with Brazil?s pattern of comparative advantage. Our results contribute to a better understanding of the intricate worldwide implications of bilateral trade wars.

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1 May 2026

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Journal of International Economics 1612026

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DOI: 10.1016/j.jinteco.2026.104249

https://www.sciencedirect.com/science/article/pii/S0022199626000395

This Journal article is published under the centre's Trade programme.

This publication comes under the following theme: Trade Policy and barriers to international economic integration