The Welfare Effects of Trump’s Tariff Policy

Tamara Todorova ()

EconStor Open Access Articles and Book Chapters, 2025, vol. 16, issue 4, 972-980

Abstract: We discuss the terms-of-trade effects of the import tariffs imposed by the US administration. Import tariffs benefit a large nation by suppressing the export price of the good it imports and by improving its terms of trade. This allows the large nation to move to a higher consumption point without the need for actual economic growth. The terms-of-trade gain is substantive for a large nation, while there is none for a small open economy. Borrowing on international trade theory we argue that the purpose of the import tariffs imposed by the USA is not merely to resolve trade balance issues, but rather to effortlessly improve the consumption position of the country.

Keywords: gains from trade; terms of trade; consumption position; community indifference curves; protectionism (search for similar items in EconPapers)
JEL-codes: F11 F13 F43 O41 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/335052/1/W ... ps-tariff-policy.pdf (application/pdf)

Related works:
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:zbw:espost:335052

DOI: 10.14505/tpref.v16.4(36).13

Access Statistics for this article

More articles in EconStor Open Access Articles and Book Chapters from ZBW - Leibniz Information Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().