This paper examines theoretically the structure of optimal (Nash equilibrium) tariff rates under retaliation in a two-country economy with more than two traded goods. We provide a condition under which the equilibrium tariff rates become uniform in both countries, and explore the ranking of the...

This paper provides a welfare comparison of a tariff with a combination of a production subsidy to, and a commodity tax on, an import-competing commodity in a two-country economy. We treat some plausible situations of industry protection, including where the initial tariff is above the optimal...