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2023 | 9 (23) | nr 1 | 5--25
Tytuł artykułu

Tariffs and Welfare: a Common, Invalid Anti-Tariff Argument

Warianty tytułu
Języki publikacji
President Trump imposed tariffs in 2017 on several of China's exports, notably steel. Many papers opposed these tariffs by using a common, invalid argument: rather than arguing these tariffs reduced U.S. welfare, they argue U.S. consumers and businesses pay the tariffs, a different, rhetorical issue. Their main evidence of harm is increases in imported goods' after-tariff U.S. prices, especially relative to other goods' U.S. prices. In a standard, small general equilibrium model (two countries, two goods, two factors), this price evidence is wholly ambiguous - it is even consistent with the view that Trump's tariff was optimal, increasing U.S. welfare. Even sophisticated papers are similarly ambiguous. All fail because they neglect how government uses tariff revenue. Relying on fallacious arguments makes the free-trade position look weak and encourages protectionism. (original abstract)
Opis fizyczny
  • McDonough School of Business, Georgetown University, USA
  • Al Jazeera. (2019, June 27). Who pays for Trump's tariffs: US consumers, companies, or China?
  • Altig, D., Bloom, N., Davis, S., Meyer, B., & Parker, N. (2018, August 8). Are tariff worries cutting into business investment? Federal Reserve of Atlanta.
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  • Bellora, C., & Fontagné, L. (2019). Shooting oneself in the foot? Trade war and global value chains. CEPII Working Paper.
  • Bickerdike, C.F. (1906). The theory of incipient taxes. Economic Journal, 16(64), 529-537.
  • Bickerdike, C.F. (1907). Review of protective and preferential import duties by A.C. Pigou. Economic Journal, 17(65).
  • Boehm, E. (2019, August 19). Peter Navarro says the 'data' show Americans aren't paying Trump's tariffs. In fact, they show the opposite. Reason.
  • Brinkley, J. (2019, August 12). Trump still doesn't know who pays tariffs. Forbes.
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