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Tariffs and Politics: Evidence from Trump’s Trade Wars

Thiemo Fetzer and Carlo Schwarz

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: We use the recent trade escalation between the US and its trade partners to study whether retaliatory tariffs are politically targeted. We find comprehensive evidence using individual- and aggregate voting data suggesting that retaliation is carefully targeted to hurt Trump. We develop a simulation approach to construct counterfactual retaliation responses allowing us to both quantify the extent of political targeting, while also studying potential tradeoffs. China, appears to put a large weight on achieving maximal political targeting. The EU seems successful in maximizing political targeting, while at the same time minimizing the potential damage to its economy.

Keywords: trade war; tariff; targeting; political economy; elections; populism (search for similar items in EconPapers)
JEL-codes: D72 F13 F14 F16 F55 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-cna, nep-int, nep-pke and nep-pol
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https://warwick.ac.uk/fac/soc/economics/research/w ... werp_1227_fetzer.pdf

Related works:
Journal Article: Tariffs and Politics: Evidence from Trump’s Trade Wars (2021) Downloads
Working Paper: Tariffs and politics: evidence from Trump's trade wars (2019) Downloads
Working Paper: Tariffs and Politics: Evidence from Trump's Trade Wars (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1227

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