Tariff escalation and de-escalation: the role of market structure

Yungho Weng () and Chih-Ming Hung ()
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Yungho Weng: National Chengchi University
Chih-Ming Hung: Chung-Hua Institution for Economic Research

The Japanese Economic Review, 2020, vol. 71, issue 2, No 6, 233-246

Abstract: Abstract We adopt the conjectural variations approach to explore the rationale for tariff escalation and de-escalation. The main findings indicate that it is a welfare maximization choice for the importing country to adopt an escalated, unified, and/or de-escalated tariff scheme; nevertheless, the escalated tariff scheme is more likely to be chosen, while a unified tariff is the least likely to be adopted. Both potential market size and market structure in the importing country play essential roles for government to make the choices.

Keywords: Escalated tariff; De-escalated tariff; Conjectural variations (search for similar items in EconPapers)
JEL-codes: F12 F13 L11 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s42973-019-00012-z

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