Dennis Novy, 27 July 2018

When President Trump recently spoke of his hope for "a great bilateral trade agreement” with the UK after Brexit, what did he really mean? Dennis Novy of the University of Warwick describes what these political good intentions may look like in reality, the problems that both sides will have to solve to agree a UK-US deal, and the factors that might derail any agreement.

Chad Bown, Euijin Jung, Zhiyao (Lucy) Lu, 26 July 2018

Caroline Freund, Michael Ferrantino, Maryla Maliszewska, Michele Ruta, 24 July 2018

Gabriel Felbermayr, Jens Südekum, 28 June 2018

Jeffrey Frankel, 27 June 2018

Brian Varian, 23 June 2018

Brexit has sparked interest in trade agreements between Britain and the Commonwealth. This has a precedent in the Edwardian era, when the Dominions adopted policies of imperial preference toward imports from Britain. This column argues that New Zealand’s policy of imperial preference, enacted in 1903, was ineffective in diverting trade toward Britain, suggesting that trade policies within the British Empire or Commonwealth do not always achieve what they intend. 

Chad Bown, Euijin Jung, Zhiyao (Lucy) Lu, 19 June 2018

Nikolaus Wolf, 11 June 2018

Stefan Legge, Piotr Lukaszuk, Simon Evenett, 17 April 2018

While the Trump administration’s proposed tariff increases on Chinese imports have grabbed the headlines, few realise that other trading partners have also raised tariffs on Chinese trade. This column examines the effects of the EU removing China from its General System of Preferences in 2012. As a result of the move, $242 billion worth of EU imports from China were subject to higher tariffs, raising EU customs revenue by an estimated $4 billion.

Filip Tarlea, 07 April 2018

Preferential trade agreements don’t happen overnight – they require lengthy negotiations. This column examines the effect the process of negotiating an agreement has on trade between the negotiating parties. The results suggest that during prolonged negotiations, the expectation of the agreement, or uncertainty before the signing of the agreement, undermine bilateral trade growth.

Simon Evenett, Johannes Fritz, 24 January 2018

On 22 January 2018, President Trump imposed safeguard duties on imported washing machines and solar panels and cells. This column analyses import surges into the US from 2006 to 2016 to put these tariff increases in perspective. Using a simple, theory-inspired method for identifying surges, it finds that during 2014-6 a category of manufactured good in the US had a one-in-32 chance of witnessing an import surge each year. US import surges aren’t concentrated in sectors where China has severe excess capacity either.

Hiau Looi Kee, Alessandro Nicita, 22 October 2017

More than a year has passed since the UK voted for Brexit. This column analyses the short-term fallout of trade in goods due to potential changes in trade policies. It argues that if the UK fails to secure a new trade deal with the EU and must face tariffs with no preferences, total UK's exports to the EU would drop by at most 2%. The impact is small because the EU's import demand for UK exports is fairly inelastic, especially for products that that may face higher tariffs.

Antoine Bouët, David Laborde, 06 September 2017

During his election campaign, Donald Trump repeatedly announced that he would impose tariffs on imports from China, Mexico, and Germany. This column evaluates the likely outcomes should the US instigate trade wars by imposing such tariffs. In all scenarios, the net effect on US welfare and GDP is either zero or negative. Such trade wars would also have wider negative effects for the trading partners, and potentially, the world economy.

Hugo Erken, Philip Marey, Maartje Wijffelaars, 15 August 2017

Since taking office, US President Donald Trump has been an increasingly vocal proponent of protectionist measures. This column presents five reasons why he is unlikely to resort to full-blown protectionism: political motivations, WTO membership, the possibility of retaliation, the existence of global value chain integration and revenue streams, and the fact that automation rather than trade has caused most job losses in the US. If Trump does resort to protectionism, however, and other countries retaliate, US GDP could face cumulative losses of up to 4.5% over two years.

Daniel Gros, 30 June 2017

Trade liberalisation has been a significant driver of globalisation over the past half century, but global trade has slowed in recent years. This column argues that globalisation can also be driven by higher commodity prices, as commodities constitute a large fraction of global trade. This is reflected in trade volumes and commodity prices, which increased until around 2014 but have fallen since. Commodity price-driven globalisation implies lower living standards in advanced countries, as the higher commodity prices diminish the purchasing power of workers. 

Lionel Fontagné, Philippe Martin, Gianluca Orefice, 07 April 2017

With Brexit and the election of Donald Trump, tariffs and exchange rates are back at the centre stage of policy debates. This column revisits the assumptions economists make when estimating how tariffs and exchange rates affect exporters’ performance. It argues that the elasticity of firm-level exports to firm-level export prices is an important factor that should be taken into account. Using French firm-level data, it finds that exporters react even more strongly to firm-level electricity cost shocks than to tariff or exchange rate shocks.

Doireann Fitzgerald, Stefanie Haller, Yaniv Yedid-Levi, 25 March 2017

Tariffs across the world may be set to increase for the first time in generations, but the impact of this on trade will depend on the way in which exporters and potential exporters make decisions. Using data on Ireland's manufacturing exports, this column describes how the evolution of quantities and prices for export entrants suggests an important role for the customer base in explaining exporter behaviour. 

Alan de Bromhead, Alan Fernihough, Markus Lampe, Kevin O'Rourke, 24 March 2017

With Brexit looming, and protectionist pressures mounting elsewhere in the developed world, the question of whether trade policy matters is taking on more significance. This column looks at the extent to which trade policy was responsible for the shift towards intra-imperial trade in the interwar period. Both tariffs and quotas increased the Empire’s share of British trade, suggesting that trade policy mattered more for interwar trade patterns than the cliometric literature has suggested.

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