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13

I interpret your question more broadly as one about whether protectionism has ever "worked". Two economists that think it has are Chang Ha-Joon and Dani Rodrik. You can therefore look up their work. Two arguments they use are: The infant industry argument. In a 2007 article, Chang gives various examples of protectionism "working", including the US in the ...


6

Foreign produced goods will see price increases directly as a result of the tariff, which adds to the prices of these goods. The full tariff may not be passed through, as these higher prices will reduce demand, changing the supply/demand balance Domestically produced goods will usually see price increases indirectly as a result of the tariff, as demand for ...


5

Entry price system (EPS) is a EU-specific term relating to their food import tariffs, more specifically to fruits and vegetables. It's a somewhat complicated system designed to strongly discourage imports below a certain price. This is a summary from 2009 paper: The EU protects growers of 15 kinds of selected fruits and vegetables against international ...


4

Indeed it's difficult to account for all the real-life complexities, but the basic game-theory model of trade wars is prisoner's dilemma, e.g. https://leadersatwork.northeastern.edu/management/trump-tariffs-and-the-prisoners-dilemma/ The concept of the Prisoner’s Dilemma is important to a number of business school subjects, including economics and ...


3

There are sometimes cases where protectionist trade policies are a good thing. (note this is a big debate, so a bit of bias here). Lets look at an example to make it clear... Suppose I'm country A and you are country B. I'm a small country, you are a large one. My country is 100% agriculture based. Your country is completely diverse and strong in all ...


3

There is nothing to prevent other countries "taking advantage" of an export market's UBI. However, I don't think that that implies a country introducing a UBI would need to increase tariffs, and I have never heard this being advocated. Since UBI hasn't been implemented on a large scale, there is little compelling evidence on what its effects will be, but a ...


3

To summarise crudely: the tariffs are punitive, to give all producers within the EEA as much of an advantage as the trade negotiators could deliver. And because the EEA represents a wealthy group of around half a billion consumers (very many of whom are not individually wealthy; but collectively are wealthy), the EU has huge negotiating power on trade ...


3

No, there is no mechanism or force that prevents the USA's (current/former) trading partners from cooperating amongst themselves to ramp-up trade amongst themselves to compensate for reduced trading with the USA. And the USA offers very few goods or services that couldn't be substituted with goods or services from elsewhere: but note that supply chains don'...


3

Due to the tariff, the supply of any product being imported from Mexico to the U.S will shift back. This would mean that prices of goods will increase in the U.S itself and most of the tariff will eventually be paid by U.S citizens who buy the goods. As the price increases, consumer surplus decreases and the market will not be at equilibrium, therefore a ...


2

Thanks to Ubiquitous for finding this paper. Just scanning by eye it seems it could be summarised by saying: the bulk of items have a tariff in the range 5-10% with a smaller amount either less than 5 (including some 0%) or in the range 10-12%. Very few items have a tariff of over 12%.


2

Here is a reference by Feldstein, Krugman that is often quoted when discussing the FX neutrality of border tax adjustments: http://www.nber.org/chapters/c7211.pdf Another useful reference that takes a somewhat skeptical view and lists more references is http://voxeu.org/article/exchange-rate-implications-border-tax-adjustment-neutrality. All models ...


2

You get cheaper access to inputs. For a large advanced economy that is relatively diversified, it is possible that unilateral tariff reductions across many or all sectors can be good for the economy by freeing up resources presently occupied in low-value activities with few prospects to contribute to technological progress. The additional ease of doing ...


2

can a company write off these tariffs and eventually receive a tax refund on the import taxes they paid? A country might enact provisions to exempt (possibly via a refund) from tariffs if the importer company or the intended use of the import meets certain conditions. But generalizing a reimbursement in the form of tax refund (or tax credit) would defeat ...


2

We don't know. Consider the following possibilities: The tariff lasts long enough that the United States soybean farmers switch from soybeans to some other crop. When the tariff is dropped, they don't change back. Brazil keeps the business. Brazilian farmers open new land and buy equipment specifically for soybeans. When the tariff ends, Brazil and ...


2

One caveat to the author you refer to, Thomas Sowell is a staunchly conservative economist, so most arguments you hear from him will stick to the Econ 101 wisdom that government intervention is usually bad, tariffs are always bad (to be fair, it is hard to use them to correct externalities for global "public goods"), etc. Although tariffs probably were not ...


2

As of April 2018, the tariffs are targetted at products in which Chinese companies dominate. They would apply to products made by American companies in China and imported to the US, but the exact products covered have been chosen to minimise this effect. Nevertheless, it will most likely increase costs for American manufacturers that depend on imported ...


2

Assuming a competitive global market, If an importer would by steel in the global market in global prices, he will have to absorb the tax cost at importing, then roll it to its customers at home The exporter will not absorb the tax, since it can sell to other countries without it. If the importer's country is big enough market-wise, then: some tax ...


2

The standard supply and demand model is a model. Models by definition are distorted version of reality not reality by themselves. The model also ignores transportation costs and other real life issues as well. However, think about the main message of the model that tariffs decrease overall welfare. Assuming that consumers randomly decide to either consume ...


1

Several channels I could think of: As you said, protectionist policies tend to raise the cost of goods that could previously be imported. If these goods are intermediaries for the export sector, the firms in those sectors would be affected. This is the most direct channel I could think of. You could also argue that the other countries will respond to the ...


1

First a disclaimer: Trade imbalances are something that we should expect to happen, especially between two massive economies like the US and China. In fact, it will probably be very hard to find a pair of countries that don't have a trade imbalance (unless they don't trade at all). This does not mean that there is something wrong necessarily, however, a ...


1

It depends on the importing country or bloc (X), and the country the import is coming from (Y), and the product category (Z). If X is not a WTO member, and is not party to a trade agreement with Y, then tariffs can be set unilaterally. If X is a WTO member (and has bound Z) or has signed a preferential trade agreement with Y that covers Z, then the tariff ...


1

Across the board tariffs (ex: sales tax) can result in higher prices or "inflated" prices. This is usually not what economists refer to when they say inflation. Inflation that the fed is concerned with, is an across the board increase in all goods as a result from changes in the money supply. Something, that the fed can directly influence, whereas the fed ...


1

One answer and one comment here make the false claim that tariffs are equivalent to currency depreciation, playing around with the exchange rate of your currency can "eliminate" a tariff, and so forth. I think they are being confused by a well-known equivalence result, which says that a simultaneous import tariff and export subsidy at the same rate is ...


1

Assume that a chinese company is selling a product for 100 RMB or 16 USD. With the 10% tariff the cost for an american importer rises to 17.6 USD. If the the RMB depreciates 8% and the price in RMB is unchanged the importer pays 8% less in USD or 16.192 USD. Depreciating the RMB by 8% offsets (almost all of) the effect of the 10% tariff. This ...


1

A working paper on this question was just published, albeit the document is in Spanish. The abstract is in English though. The report is solely concerned with inflation. Here is the abstract: The goal of this research is to simulate the possible effects of the 20% increase in tariffs on the Mexican economy. The price model used is based ...


1

In the case of Apple at least, the answer is yes: this article dated August 31 2019 talks about the impact of the latest round of tariffs on Apple products produced in China. Apple, the largest U.S. technology company by market cap, has its products assembled in China by Foxconn and then ships them to consumers all over the world. The Apple Airpods, Apple ...


1

Well, due to Lerner's Simmetry Theorem, an import tax has the same effect of an export tax. When China makes its imports from the US more expensive, its exports get more expensive too.


1

It could be a sustainable economic policy. It depends. Assuming your government doesn't have a big budget surplus, it will have to replace revenue lost from tariffs -- i.e. raise other taxes. Most taxes are distortionary, i.e. discourage productive economic behaviour. Especially for less developed countries and countries with weaker international ...


1

At a market equilibrium, marginal cost and marginal utility are equal. This does not mean that the cheaper good is preferred. Note that the US imports primarily higher quality steel at a higher price, and not lower quality steel at a lower price. Regarding the subquestion: As for how it could cause a trade war, this is probably related to a belief that if ...


1

You asked "why is cheaper always being preferred". Well, it's not. People routinely pay more for quality. Cheaper is almost always preferred for identical products. But cheaper is not always preferred for goods that are only partial substitutes. For example, a well-made pair of shoes that will last ten years, will cost more than an equally-comfortable pair ...


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