Template-Type: ReDIF-Paper 1.0
Title: When Growth Stumbles, Pollute? Trade War, Environmental Enforcement, and Pollution
Author-Name: Xinming Du
Author-Email: xdu@nus.edu.sg
Author-Name: Lei Li
Author-Email: lei.li@uni-mannheim.de 
Classification-JEL: Q53, Q56, F18
Keywords: Air pollution, environmental enforcement, political incentive, trade war

Abstract: This paper studies how perceived risks of economic downturns affect pollution from the
perspective of political incentives and environmental enforcement. In the context of the
U.S.-China trade war, we find a 1% increase in the U.S. tariff leads to 0.9% and 0.7%
increases in SO2 and PM2.5 in Chinese cities. Hourly data suggests the pollution increases
are concentrated at night. The surprising findings can be largely attributed to lenient
environmental policies enforced by local government officials who are politically motivated.
Cities more exposed to tariffs place less emphasis on environmental issues in local government
reports and impose fewer fines on firms violating environmental regulations.

Note: 
Length: 65
Creation-Date: 2025-02
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp658
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2025_658