Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/197910 
Year of Publication: 
2018
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2018-57
Publisher: 
Bank of Canada, Ottawa
Abstract: 
We build upon new developments in the international trade literature to isolate and quantify the long-run economic impacts of tariff changes on the United States and the global economy. In particular, we apply the most recent data and trade elasticity estimates to the Ricardian model of Caliendo and Parro (2015) to quantify the long-run impacts of the recently applied and proposed tariff changes, including the U.S. tariffs on steel and aluminum imports and the rounds of additional tariffs between the United States and China. To fit the reality of the current trade policy shift, our analysis also allows for quotas and endogenizes trade balances. Overall, our results suggest that the newly imposed and proposed tariff schemes imply considerable changes in trade flows and sectoral output reallocations, but modest impacts on long-run aggregate prices and output levels.
Subjects: 
Recent economic and financial developments
Trade integration
JEL: 
F11
F13
F14
F15
F50
F62
F68
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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