Trade Policy and Structural Change

Hayato Kato, Kensuke Suzuki, Motoaki Takahashi and Hayato Kato
Authors registered in the RePEc Author Service: Hayato Kato

No 12050, CESifo Working Paper Series from CESifo

Abstract: We study how tariffs affect industrial structure and welfare in an economy where sectors are complements and preferences are nonhomothetic—two drivers of structural change. Import tariffs on a sector influence sectoral composition by affecting its price relative to other sectors and national income, as well as the sector’s net exports. We qualitatively characterize these mechanisms and use a quantitative dynamic model to show that a counterfactual 20-percentage-point increase in U.S. manufacturing tariffs would have raised the manufacturing value-added share by one percentage point and increased welfare by 0.41 percent. If trading partners retaliated, welfare would have fallen.

Keywords: tariff; ricardian model of trade; structural transformation; nonhomothetic preferences; capital accumulation; trade war (search for similar items in EconPapers)
JEL-codes: F11 F13 F16 F43 O41 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-int and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/cesifo1_wp12050.pdf (application/pdf)

Related works:
Working Paper: Trade Policy and Structural Change (2025)
Working Paper: Trade Policy and Structural Change (2025)
Working Paper: Trade Policy and Structural Change (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12050

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().