The Sequencing of Import Tariffs and Emissions Taxes: Does the Timing Impact Economic Performance?

Shoji Haruna and Rajeev K. Goel

No 12527, CESifo Working Paper Series from CESifo

Abstract: The intersection of environmental policies and trade policies on external diseconomies has received considerable attention in recent years. However, the impacts of the timing of pollution taxes versus import tariffs on economic performance have not been formally considered, and this forms the focus of this work. In a political economy context, import tariffs might be imposed first due to protectionist or budgetary considerations, while environmental compulsions might lead to precedence of pollution taxes. Our results show that social welfare is greater when import tariffs precede pollution taxes. Pollution taxes are lower, and domestic production is greater when import tariffs are imposed first.

Keywords: policy timing; environmental policy; tariff policy; performance comparison; production pollution; consumption pollution (search for similar items in EconPapers)
JEL-codes: D43 F13 L13 Q56 (search for similar items in EconPapers)
Date: 2026
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