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Tariffs and politics : evidence from Trump’s Trade Wars
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Fetzer, Thiemo and Schwarz, Carlo (2020) Tariffs and politics : evidence from Trump’s Trade Wars. Economic Journal, 131 (636). pp. 1717-1741. doi:10.1093/ej/ueaa122
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Official URL: http://dx.doi.org/10.1093/ej/ueaa122
Abstract
We use the recent trade escalation between the USA 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 quantify the extent of political targeting while also studying potential trade-offs. China appears to place great emphasis on achieving maximal political targeting. The EU seems to have been successful in maximising political targeting while at the same time minimising the potential damage to its economy.
| Item Type: | Journal Article | |||||||||
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| Subjects: | E History America > E151 United States (General) H Social Sciences > HF Commerce J Political Science > JK Political institutions (United States) J Political Science > JZ International relations |
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| Divisions: | Faculty of Social Sciences > Economics | |||||||||
| Library of Congress Subject Headings (LCSH): | United States -- Foreign economic relations, United States -- Foreign relations, Trump, Donald, 1946-, United States -- Politics and government, Tariff -- United States | |||||||||
| Journal or Publication Title: | Economic Journal | |||||||||
| Publisher: | Oxford University Press | |||||||||
| ISSN: | 0013-0133 | |||||||||
| Official Date: | 9 December 2020 | |||||||||
| Dates: |
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| Volume: | 131 | |||||||||
| Number: | 636 | |||||||||
| Page Range: | pp. 1717-1741 | |||||||||
| DOI: | 10.1093/ej/ueaa122 | |||||||||
| Status: | Peer Reviewed | |||||||||
| Publication Status: | Published | |||||||||
| Access rights to Published version: | Open Access | |||||||||
| RIOXX Funder/Project Grant: |
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