Retaliation through Temporary Trade Barriers

Davide Furceri, Jonathan Ostry, Chris Papageorgiou () and Pauline Wibaux

No 17853, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Are Temporary Trade Barriers (TTBs) introduced for strategic reasons? To answer this question, we construct a novel sectoral measure of retaliation using daily bilateral data on TTB responses in 1220 subsectors across a panel of 25 advanced and emerging-market economies during the period 1989-2019. Stylized facts and econometric analysis suggest that within-year responses are more important in terms of intensity and frequency than commonly understood from the existing literature, which has tended to ignore them. We find that retaliation often consists of responses across many sectors and that same-sector retaliation is far from being the norm. In addition, we find that larger countries tend to retaliate more, and that retaliation is larger during periods of higher unemployment and when the trading partner targeted a domestic comparative advantage sector.

Keywords: Trade retaliation; Protectionism; Antidumping (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 (search for similar items in EconPapers)
Date: 2023-01
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Working Paper: Retaliation through Temporary Trade Barriers (2023)
Working Paper: Retaliation through Temporary Trade Barriers (2023)
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