Trade Wars and Trade Talks with Data

Ossa, Ralph

Trade Wars and Trade Talks with Data

No 17347, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: How large are optimal tariffs? What tariffs would prevail in a worldwide trade war? How costly would be a breakdown of international trade policy cooperation? And what is the scope for future multilateral trade negotiations? I address these and other questions using a unified framework which nests traditional, new trade, and political economy motives for protection. I find that optimal tariffs average 62 percent, world trade war tariffs average 63 percent, the government welfare losses from a breakdown of international trade policy cooperation average 2.9 percent, and the possible government welfare gains from future multilateral trade negotiations average 0.5 percent. Optimal tariffs are tariffs which maximize a political economy augmented measure of real income.

JEL-codes: F11 F12 F13 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (12)

Published as Ossa, Ralph. 2014. "Trade Wars and Trade Talks with Data." American Economic Review, 104(12): 4104-46.

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