Work

Carbon Border Adjustment and China’s Aquatic Product Exports: Impacts, Adaptation, and Trade Competitiveness

Year: 2025

Type: article

Abstract: The growing incorporation of environmental policy into international trade has transformed the competitiveness of export industries and raised risks for carbon-intensive products. Focusing on China’s aquatic product exports to the European Union, this study examines how a CBAM-related carbon exposure index is associated with export performance and what this implies for trade competitiveness and adaptation. We construct an HS6-level panel for three aquatic product groups and three EU importers over 2015–2024, combining observed trade, tariff and macroeconomic data with constructed indicators of embedded carbon exposure derived from MRIO-based emission intensities and CBAM rules. Using a structural-gravity framework estimated with PPML (HDFE-PPML), we find a negative association between carbon exposure and export values in a simple specification, but this effect weakens and becomes statistically insignificant once richer importer–year and product fixed effects are introduced. Overall, the results suggest that the early CBAM transition has not yet produced a robust impact on China–EU aquatic trade, but they highlight emerging vulnerabilities for carbon-intensive products and the need for exporters and policymakers to pursue adaptation strategies that safeguard long-run trade competitiveness.

Source: Sustainability

DOI: 10.3390/su172411315

Authors: Xianrui Mo, Zefang Liao

Institutions: Shanghai Ocean University, Guangdong Ocean University

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Climate action

Open Access status: gold

Estimated APC paid: $2,896