On April 2, 2025, President Donald Trump announced a wide-ranging set of "reciprocal tariffs" against many of its trading partners. The calculation of these tariffs have elicited a largely negative reaction in part due to the simple formula used to calculate them. In this note, I provide a model...

A major section of the existing literature on strategic trade policy, following a partial equilibrium framework, observed that imposition of tariff by the domestic country leads to a rise in their wage level. Analysis on the impact of strategic trade policy intervention (tariff) on wages and...

On April 2, 2025, President Trump declared "Liberation Day", announcing broad tariffs to reduce trade deficits and revive U.S. industry. We analyze the long-term economic impacts of these tariffs through the lens of a trade model that features flexible tariff passthrough and endogenous trade...

This paper reveals significant errors in a key variable in international trade: tariff rates. The issues arise from incomplete reporting, leading to measurement error from false interpolation by the data provider, the World Integrated Trade Solution (WITS), and selection bias from dropping...

Addressing climate change requires the deployment of green technologies. Using novel transaction-level import data from firms in 35 emerging markets in a firm-level structural gravity model, this paper examines the trade policy determinants of firms' imports of products associated with green...

The discretionary 2018 increase in the average tariff from 2% to 12% will have broad effects across the US economy reflected in the present predicted factor shares of capital, labor, skilled labor, and energy input. Error correction estimates of a Linear Almost Ideal Demand System introduce the...

Rising globalization has exerted a downward pressure on global tariffs, thereby eroding tariff revenues in developing nations. We analyse how gains from lowering import tariffs are distributed within the firm and the corresponding tax (base) implications. First, we study the effect of tariff...

Although there are many news articles of tariff dodging via the re-routing of made-in-China goods through third countries, relabeling these goods as made in Mexico or made in Vietnam, there have been no scientific studies on this issue. This paper provides statistical evidence regarding whether...

This paper first presents a dynamic model that features both real and monetary aspects of international trade and is capable of dealing with both full employment and secular unemployment. The model is then utilized to examine the effect of a tariff on the terms of trade, the trade pattern, real...

Some countries have voiced unease about differences between their own tariff rates and those of major trading partners, calling for more "reciprocity". These calls raise the question how large the negative spillover effects of countries' tariffs on others have become over time. Given a presumed...

We consider an upstream firm dealing with a downstream firm either via a two-part tariff or a linear tariff. The downstream firm faces demand uncertainty, it is risk-averse, and it must incur a fixed cost before demand realization. We show that when the fixed cost is relatively high, it is...

We study how the most-favored-nation (MFN) clause affects the tariffs of an importer, technology adoption by exporters, and global welfare. Our main contribution is to consider the disclosure effect of the MFN clause, that is, the fact that it makes tariffs not only uniform but also observable...

Europe has set itself the aim of reducing its dependency on Russian gas imports. This paper provides an economic analysis of a tariff on imports of natural gas into the EU which would help achieve this goal. The starting point is Gazprom’s monopoly on exports of gas from Russia and pricing...

We analyze whether--and, if so, how--Americans reacted to the escalation of the trade war between the United States and China in June 2018. To address this issue, we leverage surveys conducted in the U.S. during this phase of the economic clash. We find a significant reduction in support for...

To identify transactions at risk of tariff evasion, this paper matches export transaction data from France with import transaction data from Madagascar using container identifiers. Reporting discrepancies between exporters and importers are prevalent but small, with over two-fifths of importers...

To identify transactions at risk of tariff evasion, this paper matches export transaction data from France with import transaction data from Madagascar using container identifiers. Reporting discrepancies between exporters and importers are prevalent but small, with over two-fifths of importers...

Many studies use tariffs to measure changes in trade policy. This paper shows that standard sources for tariffs suffer from substantial measurement error due to misreporting and the resulting false imputation: Countries fail to report tariffs every year and missing data are more prevalent for...

We study how the most-favored-nation (MFN) clause affects the tariffs of an importer, the technology choices of exporters, and global welfare. Our key contribution is to consider that the MFN clause does not only impose nondiscriminatory tariffs but also makes tariffs observable to third...

Trade sanctions are a common instrument of diplomatic retaliation. To guide current and future policy, we ask: What is the most cost-efficient way to impose trade sanctions against Russia? We build a quantitative model of international trade with input-output connections. Sanctioning countries...

Designing appropriate import tariff rates is crucial for global trade. In this paper, we propose game-theoretic models to investigate how tariff policies affect the competition of multinational firms (MNFs) in a global trading environment. The MNFs sell substitutable products and compete in two...

This paper compares import tariffs and import price caps as policy measures to regulate a foreign monopolist. We show that for any positive import tariff there exists a set of price caps each of which Pareto-dominates the given tariff. This result is particularly important in the case of...

We study the short-run effects of import tariffs on GDP and the trade balance in an open-economy New Keynesian model with intermediate input trade. We find that temporary tariffs cause a recession whenever the import elasticity is below an openness-weighted average of the export elasticity and...

Uniform tariffs have become increasingly popular in recent years, yet their economic rationale is not strong. We identify and evaluate three sets of reasons as to why governments may prefer tariff uniformity as a means of alleviating political motives for excessive protection. First, a...