US-China tensions, global supply chains pressure, and global economy

Using a SVAR model, I examine the causal relationship between Sino-US political tensions, global supply chains pressure and global economic conditions. The impacts of structural US-China political tensions and global supply chains pressure shocks vary across different proxies of global economic conditions. It is recommended to use multiple variables to measure global economic activity for robustness checks. • US-China tensions intensify pressure on global supply chains. • Rising global supply chain pressure exacerbates US-China rivalries. • Demand shocks have little impact on US-China tensions and global supply chain pressure. • Sino-US tensions affect global economic activity differently by measurement. • Using multiple measures of global economic activity is advised for robustness checks.