The strategies of inter-regional supply chain network equilibrium under the impact of multi-trade policies

With the horizontal and vertical expansion of the industry scale and the drastic increase in the supply chain members, the inter-regional trade relationships have become more and more important to the trade network characteristics. In addition, with the evolution of globalization, enterprises, as upstream or downstream members, are distributed in various countries (regions) in the world, carrying out economic activities with national (regional) boundary characteristics. Thus, the enterprises jointly constitute an inter-regional supply chain network system and participate in the internal and external economic cycles of each country (region). Members of inter-regional supply chain networks are inevitably confronted with many trade policies in the transaction, affecting decision-making. The central trade policies for imports are free trade, tariff, and quota, and for exports are free trade and export subsidies. Trade policies have gradually become an essential factor affecting the structural stability of inter-regional supply chain networks, but the previous studies disregard the equilibrium of inter-regional supply chain network under multi-trade policies for import and export. Therefore, regarding the four kinds of trade policies, this paper divides the trade relationship between the regions of manufacturers and dealers into three categories: free trade, trade protection, and counteraction against the trade protection. Then, this study constructs an optimization model for the supply chain network members, containing the three categories of trade relations to describe the optimal decision and equilibrium conditions of manufacturers, dealers, and demand markets. Also, this research develops the social welfare functions of the regions. At the numerical analysis part, this paper designs different trade scenarios based on the trade protection for import or export products and corresponding countermeasures. This research contemplates four scenarios for the relationship between the region implementing the export trade protection and the region devising the countermeasures. Scenario a is free trade. Based on scenario a, scenario b considers that one region implements trade protection policies for export. Regarding scenario b, scenarios c and d consider that one region which is subject to trade protection policies devises countermeasures. The comparison results show that one region stimulates exportation with subsidies on export which increases the local manufacturers′ profits and reduces the price of products in the importing regional markets. Counteracting the export subsidies with tariff or quota increases product price and social welfare in the regions which taking counteracting measures, and reduce profits of manufacturers in the exporting regions. Also, there are five scenarios for importing trade protection and countermeasures. Scenario 1 is free trade as a base for the other scenarios. In scenario 2, one region imposes tariffs on trade from another region. Comparing scenarios 1 and 2 shows that the imposed tariffs decrease both the social welfare in the importing region and the profits of manufacturers in the exporting regions. Based on scenario 2, scenario 3 considers that the exporting region offers subsidies for the export to counteract the imposed tariffs. Comparing the two scenarios reveals that if one region counteracts the tariffs with export subsidy, the local manufacturers obtain higher profits and products price reduces in the importing region′s markets. In this way, social welfare decreases in the regions which are imposing the tariff. In scenario 4, the importing region imposes a quota on the export from the exporting region. Scenarios 4 and 2 have the same results, and the only difference is the local social welfare which increases in scenario 4. In scenario 5, the exporting region pays a subsidy to counteract the quota. Comparing scenarios 4 and 5 indicates that subsidy on export as the exporting region retaliation against the quota is incapable of increasing the export volume, but rather it increases the manufacturers′ profits and social welfare in the local region. Finally, this paper probes the influence of changes in each parameter of trade policy on the supply chain network members′ profits and the social welfare in the regions under different trade scenarios. And this study defines the indifference points in which various trade policies have equivalent effects on the resulted equilibrium under different trade scenarios. To sum up, this paper establishes a profit maximization model for each member in an inter-regional supply chain network with different trade relations. According to analysis, the supply chain network members′ optimal strategies are discrepant under different trade relations and scenarios.