Tariffs hit differently: The regional impact of US tariffs across Europe and the role of the single market

Gabriel Felbermayr, Julian Hinz, Sebastian Krantz, Hendrik Mahlkow and Joschka Wanner

No 2309, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: How do adverse global trade shocks affect sub-national outcomes, and what insurance does regional integration provide? We study the EU Single Market using a large-scale quantitative trade model with regional labour mobility, calibrated to a new NUTS2- based Regionalized Inter-Country Input-Output (REICIO) database. Comparing four baselines, from a fully frag-mented Europe to deep integration, we evaluate the 2025 US tariffs. Full integration of EU goods and labour markets reduces the average regional loss in real value added per capita by about 25% and more than halves its dispersion. Further deepening barely improves the mean but compresses the distribution of regional impacts even further.

Keywords: Global Trade Wars; MRIO; ICIO; European Regions; NUTS2; Global Value Chains; Sectoral Mobility Frictions; Trade Integration (search for similar items in EconPapers)
JEL-codes: F15 F16 F17 R15 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:334528

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