Could tariffs be pro-cyclcial?

Conventional wisdom says that tariffs are counter-cyclical. This paper analyzes the relationship between business cycles and applied tariffs using a disaggregated product-level panel dataset covering 72 countries between 2000 and 2011. Strikingly, and counter to conventional wisdom, we find that tariffs are pro-cyclical. This pro- cyclicality is driven by the pre-Great Recession tariff-setting behavior of developing countries on products not subject to temporary trade barriers and does not depend on the importer's perception of the global business cycle or whether the tariff is bound. Results are robust to controlling for variables emphasized in recent literature as important determinants of tariff setting.