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on International Trade |
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Issue of 2026–02–09
thirteen papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Giorgia Giovannetti; Luca Lodi; Enrico Marvasi |
| Abstract: | Geopolitical tensions are reshaping Global Value Chains (GVCs), yet little is known about the magnitude of these effects and, especially, how they translate into uneven exposures at the subnational level. This paper argues that subnational regions are a critical unit for understanding GVCs and their changes under geopolitical fragmentation. We develop a regional exposure index that links global sensitivities from structural gravity estimations of GVC-related trade with granular regional trade data. Evidence from Italian regions reveals pronounced heterogeneity in both upstream and downstream exposure, depending on sectoral specialization and partner composition. These findings suggest that geopolitical fragmentation not only reshapes GVCs but also reconfigures regional economic vulnerabilities, with direct implications for cohesion, competitiveness, and policy design. |
| Keywords: | Global Value Chains, Regional Development, Gravity, Geopolitical tensions, Trade policy. |
| JEL: | F14 F23 F51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:frz:wpaper:wp2026_02.rdf |
| By: | Dolphin, Geoffroy; Ferrucci, Gianluigi |
| Abstract: | The EU Carbon Border Adjustment Mechanism (CBAM) came into force on 1 October 2023, introducing reporting requirements for importers of covered products and, from 2026, an obligation to pay a fee on the carbon content of imported goods. This paper uses indices of ad valorem tariffs to assess the incidence of the EU CBAM on both EU member states and the EU’s trading partners. Overall, the direct impact on EU countries’ trade is estimated to be small, adding 0.1 percent to the value of EU imports when averaged across all imports, and 0.04 percent to the average cost of non-EU countries’ exports to the EU—with a maximum of 1.2 percent. However, effects could be sizeable for specific products such as iron, steel and aluminium, which can help explain CBAM’s political salience. Moreover, an expanded CBAM featuring full coverage of ETS sectors, and a significantly higher carbon price could entail larger costs in the more distant future. JEL Classification: F13, F64, Q54, Q56 |
| Keywords: | carbon leakage, carbon taxation, emissions trading, trade policy |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263177 |
| By: | Justin R. Pierce; Peter K. Schott; Cristina J. Tello-Trillo |
| Abstract: | We find that US workers outside manufacturing exhibit relative earnings increases after US trade liberalization with China. These relative gains cumulate over time as the beneficial effect of a workerâ s upstream exposureâ increased competition from China in input marketsâ more than offsets the detrimental impact of her own and downstream (customer) exposures. These relative gains are smaller for non-manufacturing workers with less ex ante firm tenure and lower initial earnings, and are absent among manufacturing workers due to a lack of upstream gains and stronger downstream losses. |
| Keywords: | Employment; Manufacturing; Labor markets; International trade; Trade policy |
| JEL: | F13 F14 F15 F16 |
| Date: | 2026–01–13 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:102365 |
| By: | Florencia Airaudo; Johannes Fleck; Kevin Vega |
| Abstract: | Recent U.S. trade policy changes have rekindled interest in Brexit, as it represents one of the few instances in which another large advanced economy implemented substantial trade policy changes. In this note, we answer two questions: How similar were trade policy adjustments in Brexit to U.S. trade policy changes of 2025? What were the short- and long-run effects of Brexit on the U.K. economy? |
| Date: | 2026–01–16 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:102362 |
| By: | Eiichi TOMIURA; Hiroyuki KUWAHATA |
| Abstract: | Firms in advanced economies trade both goods and services across national borders. Offshoring is another important channel of modern globalization. However, these relatively invisible globalization modes are not well captured in official statistics. We also note that the globalization trend has recently been altered by the tensions originating with the rise of China. We conducted a unique survey of Japanese firms to collect information of these relatively new and invisible aspects of international economic relations with China. We combine our survey results with firm-level data derived from official statistics to explore the characteristics of firms that are active within these interactions with China. We find that firms that are involved in services trade with China or firms engaged in offshoring with China tend to be more productive than firms that are not engaged in these activities. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26009 |
| By: | Otaviano Canuto |
| Abstract: | Global economic growth has been more resilient than expected, as the artificial intelligence-led growth seems to be compensating for the negative impacts of trade conflicts. Overstretched asset values and slowing jobs growth may be signaling that the balanced crossing of those two paths will be challenged. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:p47_25 |
| By: | Fatima El Khatabi (Universidad Autónoma de Madrid); Inmaculada Martinez-Zarzoso (University of Goettingen) |
| Abstract: | We investigate the trade relationship between two neighbors, Spain and Morocco, focusing on the role played by social connectedness, proxied by Facebook connections and migration flows, while controlling for singular geographical, historical, and institutional relations between the two countries, that despite the fact of being located in different continents are tied by special relations. These are partly explained by the enclaves of Ceuta, and Melilla, which share land borders with Morocco and the Saharan provinces that were previous colonies of Spain. We use a novel trade dataset between Spain and Morocco at the province level (NUTS 3) for the period from 2010 to 2018, split into 15 sectors and three transport modes. |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1769 |
| By: | Gregory Auclair (Peterson Institute for International Economics); Adnan Mazarei (Peterson Institute for International Economics) |
| Abstract: | In pursuit of President Donald J. Trump's "America First" agenda, the administration has engaged in high-level bilateral negotiations with allies and partners to encourage them to invest in US industrial and infrastructure projects. Over the last year, the White House has announced commitments by the European Union, Japan, South Korea, Taiwan, and several Gulf Cooperation Council countries (Bahrain, Qatar, Saudi Arabia, and the United Arab Emirates), among others, to import specific amounts of goods and services from the United States as well as make sizable investments on US soil. These agreements came following considerable pressure by the United States and represent a shift toward a more coercive US foreign policy. Because the administration is helping select the targets of foreign investment, it is embarking on a major expansion of US industrial policy--one paid for by allied countries. The analysis in this Policy Brief shows that much about the announced investment pledges, which surpass $5 trillion, remains unclear or aspirational, suggesting that there may be less certainty than meets the eye. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:iie:pbrief:pb26-2 |
| By: | Ṣebnem Kalemli-Özcan; Can Soylu; Muhammed A. Yildirim |
| Abstract: | We analyze how tariff uncertainty affects exchange rates, motivated by the U.S. dollar’s depreciation after the 2025 tariff announcements. Standard macro-trade models predict that unilateral tariffs appreciate the implementing country’s currency, but we show this result can be overturned by policy uncertainty. We build a two-country general equilibrium model with risk-averse agents and segmented financial markets, where tariff volatility enters uncovered interest parity through a risk-premium wedge. Higher tariff uncertainty increases precautionary savings and risk premia, leading to immediate currency depreciation even as tariffs rise. Quantitatively, the model replicates the size and timing of the observed dollar depreciation episode dynamics. |
| JEL: | E0 F3 F40 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34728 |
| By: | Monia Ghazali (University of Carthage); Rim Mouelhi (University of Manouba) |
| Abstract: | This paper analyzes the pattern of deindustrialization in MENA countries to emphasize its main features and impacts on economic development. Using data from 1960 to 2018, we examine deindustrialization patterns and investigate their influence on overall growth over different periods. Since the contribution of services to growth has increased in recent decades, we also investigate the role and impact of services on growth. The main results suggest that MENA countries started to deindustrialize at a low level of GDP per capita, which is a sign of premature deindustrialization. When deindustrialization occurs at an earlier stage of development, countries don’t benefit from the manufacturing sector’s opportunities and externalities, such as technological penetration, skill development, openness, and technological transfers. The results also suggest that manufacturing weight exerts a positive effect on overall growth over the different considered periodsin Tunisia, thereby confirming itsrole as an engine of growth. However, manufacturing weight has shown a declining positive impact over time as it has been confined to low-technology, assembly-oriented, and outsourced operations characterized by a lack of sophistication. The results also show a persistent negative relationship between service weight and GDP per capita growth over the considered periods. In fact, the expansion of the services sector in recent decades was largely driven by lowproductivity services such as trade (largely in the informal sector), government services, and (to a lesser extent) modern, highly productive services. |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1733 |
| By: | Jiandong Ju; Yuankun Li; Shang-Jin Wei |
| Abstract: | We document and characterize a new history of U.S. federal-level industrial policies by scanning all 12, 167 Congressional Acts and 6, 030 Presidential Orders from 1973 through 2022. We find several interesting patterns. First, contrary to a common perception, the United States has always been an active industrial policy nation throughout the period, regardless of which party is in power, with 5.4 laws and 3.4 Presidential Orders per year on average containing new industrial policies. Second, we identify roughly 300% more instances of industrial policies than those in the Global Trade Alert (GTA) database during 2008-2022, despite using essentially the same definition. Third, industrial policies in practice are as likely to be justified by national security as by economic competitiveness. Fourth, many U.S. industrial policies incorporate design features that help mitigate potential drawbacks, such as explicit expiration dates and pilot programs for emerging technologies. Finally, based on stock market reactions and firm performance, the identified policies are recognized as economically significant in shifting resource allocations. |
| JEL: | F1 H20 H4 K20 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34744 |
| By: | Otaviano Canuto; Jorge Arbache |
| Abstract: | Conventional wisdom holds that the United States has undergone massive deindustrialization in recent decades, with the country's manufacturing sector supposedly withering as it lost ground to China. This narrative has fueled debates about industrial policy, economic nationalism, and the reshoring of manufacturing production. But what if this story is only partially true? What if, instead of disappearing, American industry simply changed its address? Conventional wisdom holds that the United States has undergone massive deindustrialization in recent decades, with the country's manufacturing sector supposedly withering as it lost ground to China. This narrative has fueled debates about industrial policy, economic nationalism, and the reshoring of manufacturing production. But what if this story is only partially true? What if, instead of disappearing, American industry simply changed its address? |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:p48_25 |
| By: | Learmouth, Tom |
| Abstract: | This paper contributes to our understanding of how Japan became the only Asian country to achieve sustained catch-up industrialisation before WWII. It does so by analysing the absorption of useful foreign knowledge in a traditional Japanese textile town and its subsequent evolution into a modern rubber manufacturing cluster. The cluster analysed is Kurume in Fukuoka Prefecture which began the interwar period as a major producer of cotton tabi (split-toed footwear). The core argument is that Kurume firms Nihon Tabi and Tsuchiya Tabi built on their foundations as large sewing factories by ‘borrowing capacity’ from general trading companies. This enabled them to evolve into large-scale rubber-soled footwear manufacturers capable of absorbing high-level engineering knowledge necessary to compete with Dunlop and US tyremakers in Asian motor tyre markets. A rich body of new primary material ranging from the corporate archives of Mitsui Bussan and Mitsubishi Shōji to regional industrial surveys is analysed using a novel conceptual framework. This framework draws upon Klepper’s (2010) heritage theory which suggests that best-practice industry knowledge is diffused out of leading firms. Integrated into this approach is Abe & Nakamura’s (2010) suggestion that the ‘indigenous industrialization process’ in Japan identified by Tanimoto (2006) was not separate from, but interacted with, the diffusion of Western-style manufacturing. |
| JEL: | L62 L65 N15 N75 N85 N95 O14 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:wpaper:130283 |