Understanding domestic constraints on international trade negotiations : case of US-China trade war

Abstract

In two-level game theory, scholars argue that domestic factors will affect negotiators’ positioning and bargaining process due to the interactions between the domestic constituents and their state leaders. This paper investigates the implications of domestic factors, namely economic and political factors, on state leader’s positioning in trade negotiations. The study will look into the US-China trade war and analyse how US domestic influences affected Trump’s positioning in the ‘Phase 1’ trade deal. Using matching and regression techniques, the paper discovers that domestic constraints affected the position of the negotiator. Findings from this research would be useful in a deeper understanding of the impact of domestic factors on negotiations. Understanding how domestic conditions of different parties shape the ability of international negotiators to reach an agreement would be important in understanding the domestic influences on state-level bargaining.