Zusammenfassung:
When the UK left the EU, it introduced a new import tariff schedule, one of the largest MFN tariff reforms in decades of a developed economy. This paper exploits this policy change to estimate the elasticity of imports to MFN tariffs, addressing the endogeneity of trade policy through two strategies: a country-based approach using trade agreement partners whose MFN exposure is plausibly exogenous, and a product-based approach leveraging mechanical tariff changes from schedule simplification. Using a difference-indifferences design with EU imports as a control group, I find that ignoring endogeneity yields an elasticity of 2.5, while IV estimates range from 4.5 to 8.7. Dynamic responses are even larger: three years after the reform, elasticities reach 10-12. These results suggest that widely used tariff-based elasticities are substantially underestimated, with implications for quantitative trade models and welfare analysis.