Trade Wars and Trade Talks with Data

Ralph Ossa

American Economic Review, 2014, vol. 104, issue 12, 4104-46

Abstract: How large are optimal tariffs? What tariffs would prevail in a worldwide trade war? How costly would a breakdown of international trade policy cooperation be? And what is the scope for future multilateral trade negotiations? I address these and other questions using a unified framework which nests traditional, new trade, and political economy motives for protection. I find that optimal tariffs average 62 percent, world trade war tariffs average 63 percent, the government welfare losses from a breakdown of international trade policy cooperation average 2.9 percent, and the possible government welfare gains from future multilateral trade negotiations average 0.5 percent. (JEL F12, F13, O19)

JEL-codes: F12 F13 O19 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.12.4104
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Citations: View citations in EconPapers (213)

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Working Paper: Trade Wars and Trade Talks with Data (2011)
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