Export Subsidies and Countervailing Tariffs
No 268388, Economic Research Papers from University of Warwick - Department of Economics
This paper analyses how retaliation affects the profit shifting argument for export subsidies. Trade policy is modelled as a multistage game. At the first stage the foreign country sets its export subsidy, and then at the second stage the domestic country sets its tariff and/or production subsidy. If the domestic country pursues an optimal trade policy then it will always gain from a foreign export subsidy. When the domestic country uses a tariff and a production subsidy, the optimal foreign policy is an export subsidy. If the domestic country only uses a tariff then an export tax is usually the optimal foreign policy.
Keywords: Financial Economics; International Relations/Trade (search for similar items in EconPapers)
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Journal Article: Export subsidies and countervailing tariffs (1991)
Working Paper: EXPORT SUBSIDIES AND COUNTERVAILING TARIFFS (1990)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:268388
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