To What Extent Are Tariffs Offset by Exchange Rates?

Olivier Jeanne

No WP20-1, Working Paper Series from Peterson Institute for International Economics

Abstract: In theory, tariffs are partially offset by a currency appreciation in the tariff imposing country or by a depreciation in the country on which the tariff is imposed. Based on a calibrated model, this paper finds that US tariffs imposed in 2018 should not have had a large impact on the dollar but may have significantly depreciated the renminbi. This prediction is consistent with a high-frequency event analysis looking at the impact of tariff-related news on the dollar and the renminbi. Tariff-related news explains about one-third of the renminbi depreciation observed in 2018.

Keywords: Tariffs; Exchange Rates; Dollar; Renminbi (search for similar items in EconPapers)
JEL-codes: F31 F42 (search for similar items in EconPapers)
Date: 2020-01
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.piie.com/publications/working-papers/w ... ffset-exchange-rates (text/html)

Related works:
Working Paper: To What Extent Are Tariffs Offset By Exchange Rates? (2020)
Working Paper: To What Extent Are Tariffs Offset By Exchange Rates? (2020)
Working Paper: To what extent are tariffs offset by exchange rates? (2012)
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:iie:wpaper:wp20-1

Access Statistics for this paper

More papers in Working Paper Series from Peterson Institute for International Economics Contact information at EDIRC.
Bibliographic data for series maintained by Peterson Institute webmaster (webmaster@piie.com).