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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

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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
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
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:
DateEvent
9 December 2020Published
8 October 2020Accepted
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:
Project/Grant IDRIOXX Funder NameFunder ID
CAGE[ESRC] Economic and Social Research Councilhttp://dx.doi.org/10.13039/501100000269
Open Access grantUK Research and Innovationhttp://dx.doi.org/10.13039/100014013
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