 Economic de-integration in North America and foreign direct investment from JapanJapan and the World Economy, 2022, vol. 61, issue C Abstract: We investigate, from the perspective of the auto industry, the impact of US steel and aluminum tariffs and the resumption of auto tariffs under the revised North American Free Trade Agreement, on trade in North America and foreign direct investment (FDI) from Japan. The results of our policy simulation analyses with a recursive dynamic computable general equilibrium model are as follows. Canada and Mexico, being alternative trade partners with the US and other countries, would benefit from US steel and aluminum tariffs. Due to the auto tariffs on intra-North America exports, Canada and Mexico would lose a large part of their windfall benefits from US steel and aluminum tariffs. Japan’s FDI in Canada and Mexico would fall sharply. As the de-integration of North American economies proceeded, Japan would increase its auto production and exports. The negative impact on Japan’s welfare, largely the result of US steel and aluminum tariffs, would be neutralized by the US abolition of tariffs on Japanese auto exports. Keywords: Economic de-integration; Foreign direct investment; Auto industry; Computable general equilibrium analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:61:y:2022:i:c:s0922142521000591 DOI: 10.1016/j.japwor.2021.101114 Access Statistics for this article Japan and the World Economy is currently edited by Robert Dekle and Yasushi Hamao More articles in Japan and the World Economy from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.