Mit der Neuordnung der internationalen Lieferketten hat Mexiko als Standort für neue Auslandsinvestitionen an Bedeutung gewonnen. Das Land konnte vom Nearshoring profitieren, das heißt von der Verlagerung von Dienstleistungen oder Produktionsprozessen in die Nähe der Konsumentenmärkte. Damit...

We extend a quantitative general equilibrium model of global trade networks to evaluate the economic impacts of various trade disruptions. Our analysis considers scenarios such as US-China trade wars, a broader Cold War 2.0 decoupling, Trump-era tariffs, and disruptions in the trade of critical...

Mit der Neuordnung der internationalen Lieferketten hat Mexiko als Standort für neue Auslandsinvestitionen an Bedeutung gewonnen. Das Land konnte vom Nearshoring profitieren, das heißt von der Verlagerung von Dienstleistungen oder Produktionsprozessen in die Nähe der Konsumentenmärkte. Damit...

This study applies the Quadratic Almost Ideal Demand System (QUAIDS) to the Asian Development Bank's Multi-Region Input-Output (MRIO) dataset to estimate global demand and supply elasticities across intermediate vs. final, and domestic vs. foreign sectors. Using pooled data from 2021-2023,...

Were the US to impose large and lasting tariffs on its imports from the EU, the effect on the euro area (EA) would be substantial and far-reaching. We expect the direct impact to be inflationary in the US and contractionary on EA aggregate demand and output. The indirect impact through an...

Were the US to impose large and lasting tariffs on its imports from the EU, the effect on the euro area (EA) would be substantial and far-reaching. We expect the direct impact to be inflationary in the US and contractionary on EA aggregate demand and output. The indirect impact through an...

Recent evidence shows that imports of critical products can be concentrated on a small number of supplier countries. Such supplies are therefore vulnerable to disruption, whether because unfriendly governments seek to weaponize dependency or for other reasons. In a laissez-faire equilibrium,...

This Policy Brief explores the potential impact of forming a customs union between the European Union (EU) and key global partners (e.g. Canada, the UK, Mexico and Japan) as a strategic response to U.S. President Donald Trump's threatened tariffs. Using the GSIM partial equilibrium model, the...

The rapid growth of international retail e-commerce has drawn scrutiny to the US de minimis rule, which exempts low-value imports from tariffs. This paper analyzes how the rule shapes the small-value e-commerce trade. We examine whether tariff increases during the 2018-2019 US-China trade war...

US trade policy has taken a sharp turn away from multilateralism, with sweeping new tariffs posing a serious threat to global supply chains. As the US remains the EU’s largest export market for goods, these measures carry significant repercussions for the bloc. Exports to the US are heavily...

This study explores the role of tariffs in addressing the Dutch Disease effect in resource-rich developing economies. By developing a theoretical framework built on existing literature, the study explores the role that the structure of taxes, internationally, can play in mitigating the adverse...

Imports feature at all stages of production as well as in final consumption, and this is key to how tariff shocks play out. If imposed on imports in upstream sectors, import tariffs lower domestic output in downstream sectors; if imposed downstream, they raise upstream production. The aggregate...

What is the optimal monetary policy response to tariffs? This paper explores this question within an open-economy New Keynesian model, characterizes the macroeconomic effects of tariffs, and shows that the optimal monetary policy response is expansionary, with inflation rising above and beyond...

The new US administration has a clear agenda of reducing imports to the US and attract FDI by reducing tariffs and using the proceeds for supporting investment in the US. This paper uses a dynamic two country US vs RoW model where monopolistically competitive firms make export and FDI decisions....

Amid the evolving U.S.-China tariff realignment and the broader restructuring of global value chains, this paper evaluates the vulnerability and strategic positioning of the Philippines alongside four other ASEAN economies-Indonesia, Malaysia, Thailand, and Vietnam. For the ASEAN-5, the key...

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...

As a growing number of countries face rising tariffs in 2025, stablecoins may be the answer to geoeconomic fragmentation by providing solutions that enhance trade efficiency in response to protectionist policies and regional alliances. While the United States leverages stablecoins to reinforce...

With President Trump’s return to office, United States (US) trade and development policy has undergone a decisive shift – marked by sweeping cuts to the United States Agency for International Development (USAID), shifting alliances, escalating trade tensions, and a broader retreat from...

Geoeconomic pressure - the use of existing economic relationships by governments to achieve geopolitical or economic ends - has become a prominent feature of global power dynamics. This paper introduces a methodology using large language models (LLMs) to systematically extract signals of...

• Using the KITE model suite, we study the economic costs of the Trump tariff policy for Europe, and analyze the potential for trade diversion from China. • If the current tariff regime stays in place, trade between the U.S. and China would fall dramatically, hurting mainly the U.S. and the...

It has been suggested that an intensified trade war between China and the US could reduce CO2 emissions associated with exports. We develop an export-greenfield-endogenous merger model, showing that significantly increased tariffs can enable domestic firms to undertake entry-deterring...

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...

Trump's renewed tariffs on traditional allies-including the EU, Canada, Mexico, and Brazil-signal a return to aggressive protectionism, openly disregarding WTO rules and threatening the stability of the global trade system. The authors argue that unilateral retaliation by individual countries is...

The United States (US) and European Union (EU) are at risk of entering a full-blown trade war. Three months ago, on "Liberation Day", US President Donald Trump imposed high import tariffs on almost all countries, including the EU. He then suspended them at short notice to negotiate with over 90...