Quantitative Assessment of the Multi-Dimensional Impacts of U.S. “Reciprocal Tariffs” Policy: A Comprehensive Modeling Approach

Xinyue Wang () and Qian Wan
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Xinyue Wang: Beijing University of Chemical Technology
Qian Wan: Beijing University of Chemical Technology

A chapter in Proceedings of the 2026 11th International Conference on Social Sciences and Economic Development (ICSSED 2026), 2026, pp 227-235 from Springer

Abstract: Abstract The 2025 U.S. “reciprocal tariffs” policy dramatically increased the U.S. trade-weighted average tariff rate from 2.44% to 20.11%, fundamentally reshaping global trade patterns. This paper develops an integrated quantitative framework to systematically evaluate the multi-dimensional impacts of this policy across three key sectors and on overall economic welfare. For soybean trade, we integrate a trade gravity model with partial equilibrium analysis, finding that U.S. soybean exports to China would virtually exit the market under 25% tariffs, while Brazilian market share would increase from 70.4% to over 95%. For automobiles, a tri-channel supply chain model and two-stage dynamic game framework reveal that Japanese direct exports would decrease by 26%, with Mexican production share rising from 25% to 40%, indicating multinationals rational choice of “circuitous production” rather than manufacturing reshoring. For semiconductors, a tiered market model with system dynamics simulation demonstrates that a balanced subsidy-centric strategy achieves optimal comprehensive performance (score 0.778) compared to tariff-centric approaches (0.722). Tariff revenue forecasting using an industry heterogeneity elasticity model with Monte Carlo simulation shows a net present value of only $32 million and Policy Efficiency Index of 0.05, indicating economic inefficiency. Our findings suggest that unilateral tariff protection is costly and inefficient, while comprehensive approaches integrating tariffs with industrial policies better balance economic efficiency and national security.

Keywords: Reciprocal Tariffs; Trade Gravity Model; Policy Efficiency Index; Game Theory (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6239-701-9_25

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DOI: 10.2991/978-94-6239-701-9_25

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