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on International Trade |
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Issue of 2026–04–27
thirteen papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Bonnet Paolo (European Commission - JRC); Ciani Andrea (European Commission - JRC); Zaurino Elena (European Commission - JRC) |
| Abstract: | Export controls play a prominent role in the ongoing technological race between the United States and China. This study investigates the short-term direct effects of US export controls on US exports as well as the indirect effects of these measures on the exports of third countries. We collect data on unilateral US measures targeting all exports to China of specific products in the semiconductor production chain, and merge it with monthly trade data on exports of the same products from countries participating to the production chain. First, we find a negative direct effect on US exports of chips. Second, results show positive, significant, effects on the exports of equipment for the manufacturing of semiconductors from the EU, Japan, and Singapore. This evidence is not only suggestive of a limited indirect enforcement of US policies on foreign jurisdictions, but also of the unintended effects such a unilateral policy can trigger. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:jrs:wpaper:202602 |
| By: | Tamar den Besten; Regis Barnichon; Diego R. Känzig; Aayush Singh |
| Abstract: | We study the macroeconomic effects of tariff policy using U.S. historical data from 1840–2024. We construct a narrative series of plausibly exogenous tariff changes – based on major legislative actions, multilateral negotiations, and temporary surcharges – and use it as an instrument to identify a structural tariff shock. Tariff increases are contractionary: imports fall sharply, exports decline with a lag, and output and manufacturing activity drop persistently. The shock transmits through both supply and demand channels. Prices rise in the full sample but fall post-World War II, a pattern consistent with changes in the monetary policy response and with stronger international retaliation and reciprocity in the modern trade regime. |
| JEL: | E30 F13 F14 F41 H20 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35102 |
| By: | Ling Feng; Qiuyue Huang; Zhiyuan Li; Christopher M. Meissner |
| Abstract: | This paper investigates the causal impact of international trade on interstate military conflicts using global bilateral data from 1962 to 2014. To address endogeneity concerns, we exploit exogenous spatial-temporal variation in international trade stemming from technological advances in air relative to maritime transport. Empirical results demonstrate a strong “peace dividend” of international trade: that is, increased trade significantly reduces the probability and intensity of conflicts between nations. This effect remains robust across specifications and withstands a wide range of potential confounders. Such findings highlight how economic interdependence shapes international conflict—a relationship that is especially relevant amid escalating geopolitical tensions and the global shift toward “decoupling”, “de-risking”, and greater trade protectionism. |
| JEL: | F14 F51 F69 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35078 |
| By: | Marina Azzimonti; Jacob Titcomb |
| Abstract: | This paper analyzes the effect of the 2025 U.S. import tariffs on import prices and local labor-markets. To that end, we use highly disaggregated customs data to construct realized tariff rates from actual duty collections, rather than announced statutory schedules. An important contribution is that we document a large and persistent gap between the two measures, driven by within-country product reallocation, cross-country sourcing shifts, and implementation frictions. This implies that statutory rates are a poor proxy for the trade shock that firms actually faced. Using realized tariffs, we find that pass-through of realized tariffs into import prices was close to one hundred percent, with negligible adjustment by foreign exporters and a significant reduction in import quantities. When we examine local labor-market consequences of the increase in import tariffs, we find that counties which are more exposed to import-competing sectors experienced small declines in unemployment and that rising input costs weighed marginally on labor-force participation. Both effects, though heterogeneous across space, are economically negligible. In contrast to the 2018–2019 tariff episode, where rising input costs dominated, resulting in lower manufacturing employment, the 2025 tariffs did not generate large labor-market changes in either direction. |
| Keywords: | Employment and labor markets; trade and international economics |
| JEL: | F1 F16 |
| Date: | 2026–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedrwp:103055 |
| By: | Joseph Kopecky (Department of Economics, Trinity College Dublin) |
| Abstract: | I develop a quantitative multi‐country, multi‐sector trade model in which population age structure shapes comparative advantage through age‐dependent skills. Workers of different ages supply heterogeneous bundles of cognitive and physical abilities that appreciate or depreciate over the life cycle, and sectors use these skills with differing intensities. I embed this mechanism into a Ricardian trade model calibrated to 30 countries and 20 manufacturing sectors. Reduced‐form evidence from a panel of 204 countries (1995‐2024) documents a 'grey advantage': a country's share of older workers is associated with a shift in its export mix toward appreciating‐skill‐intensive sectors. Evaluated in partial equilibrium, the calibrated model recovers 84% of this empirical relationship. General equilibrium adjustment then compresses the trade composition response by a factor of ten, as endogenous wage and price changes absorb the sectoral reallocation but generate welfare‐relevant real-income effects. Forward projections decompose the total demographic effect into a workforce‐size channel (shrinking populations produce less) and a skill‐composition channel (aging shifts the mix of skills, altering sectoral comparative advantage). The composition channel generates welfare effects ranging from ‐0.9% to +0.05%, comparable to standard trade‐policy shocks, and exhibits a striking temporal pattern. Historical demographic divergence supported positive composition gains, but as countries' age structures converge toward a common older profile, these gains are reversing. Bilateral trade flows reallocate accordingly, with the model projecting that China‐US trade will fall by 10% and India‐US trade will rise by 34% in the coming decades. |
| Keywords: | Comparative advantage, Population aging, Trade, Demographics, Ricardian model |
| JEL: | F11 F14 F17 J11 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:tcd:tcduee:tep0726 |
| By: | Banri ITO; Naoto JINJI; Megumi NAOI |
| Abstract: | This study uses an original firm-level survey fielded during the Trump 2.0. negotiations to examine how firm characteristics relate to (i) whether and how strongly firms perceive tariff impacts and (ii) whether and how they adjust (including measures under consideration). Impacts are widespread among U.S. exporters and are largest for firms engaged in related-party (intrafirm) exports, consistent with rigid internal transactions and compliance constraints (e.g., rules of origin, pricing, regulation). Among firms with limited direct exposure to North America, more upstream firms report stronger impacts, suggesting supply-chain spillovers beyond direct exports. Adjustments are more selective, rising with firm size, and are most advanced among large, high-productivity firms. Adjustment menus differ by exposure, with intrafirm exporters favoring U.S. localization via foreign direct investment, arms-length exporters relying more on price/cost adjustments, and China/Asia exporters shifting toward third-country markets. Policy should lower export-related fixed costs for smaller firms and expand support for third-country expansion. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26035 |
| By: | Joshua Aizenman; Rodolphe Desbordes; Jamel Saadaoui |
| Abstract: | How damaging is a “trade war” compared to a “military war” or a “war of words”? Aggregate conflict indicators cannot say, because they treat missile strikes, sanctions, and diplomatic protests as equivalent. We build a monthly bilateral indicator from GDELT event data, calibrated against human-curated ground truth, that decomposes hostility into four layers: kinetic fighting (“military war”), military posture, sanctions-context tensions (“trade war”), and routine diplomacy. The decomposed panel reveals a secular shift: over the past decade, governments have steadily substituted economic coercion for military confrontation, nearly doubling the trade-weighted share of hostility channelled through sanctions contexts. In a gravity trade model, the aggregate indicator is negative, large, and statistically significant, but the decomposition reveals that only two layers drive the result. Kinetic conflict and trade-context hostility are both economically large and precisely estimated; routine diplomacy, despite dominating measured hostility, has no trade effect at all. The directed structure uncovers a retaliation channel that compounds trade losses over several months. Our measure remains a robust determinant of international trade in a horse race against closest alternative bilateral indicators. Relative to a pre-escalation baseline, the geopolitical deterioration of the past decade has put roughly $334 billion of bilateral trade at risk, with the US–China pair accounting for half. |
| JEL: | F15 F43 F5 F50 F51 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35077 |
| By: | Graham Pilgrim; Yann Dorville; Annabelle Mourougane |
| Abstract: | This paper develops a novel methodology to derive timely, experimental estimates of trade by commodity with global coverage using messages from the Automatic Identification System (AIS). By transforming high-frequency vessel movements into trade proxies, the approach makes it possible to monitor global cross-border flows in near real time for 23 commodity groups worldwide, covering 97.8% of existing berths across 3534 ports. The methodology improves upon Pilgrim et al. (2024) by exploiting information at the berth level, which increases the accuracy of port delineation and allows, with the use of satellite imagery and a rule-based approach, to get a mapping of commodities. While the resulting trade estimates are experimental and not designed to replace official trade statistics and are surrounded by uncertainties, especially regarding containerised trade, they provide valuable and complementary information on trade dynamics, particularly in periods of heightened uncertainty or rapid change. Their main strength lies in their ability to capture turning points, disruptions and emerging trends well ahead of traditional data releases. The methodology also allows to derive timely estimates of transit trade. |
| Keywords: | Big data, Maritime trade, Port activity, Port congestion |
| JEL: | C55 C81 F17 |
| Date: | 2026–05–06 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stdaaa:2026/02-en |
| By: | Clara Portela; Juan S. Mora-Sanguinetti |
| Abstract: | The efficacy of international sanctions in bringing about compliance with the goals of the sender is of interest to both International Relations (IR) and development scholars. Yet, aid suspensions receive less attention in sanctions research than economic sanctions, which may be biasing our understanding of sanctions efficacy. Since recent research has established that different autocratic types display diverging degrees of resilience to sanctions, we ascertain whether such claims are applicable to aid suspensions. First, we look at how resilient different regime types are to sanctions and then investigate whether results for aid suspensions differ from those for sanctions in general. After that, we hypothesise that wealth protects autocracies less from aid suspensions than from other sanctions because their effects are harder to evade. With the help of econometric analysis, we test our hypotheses on original data that feature aid suspensions as a stand-alone category. Test results corroborate the superior resistance of single-party regimes and monarchies. A final test on the role of target prosperity uncovers a nuance: affluence strengthens target resistance to economic sanctions but not to aid suspensions. This confirms our evasion hypothesis: while alternative trade routes can offset a ban on trade with a set of senders, substitute donors are rare. |
| Keywords: | Foreign Aid, Economic Sanctions, Regime Types, Sanctions Evasion |
| JEL: | F51 O19 F53 Z18 O55 F13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:1042 |
| By: | Barbara Castelleti Font; Antoine Lalliard |
| Abstract: | In the context of the recent hardening of US trade policy, it would be simplistic to limit the analysis of financial flows between the United States and the euro area to trade in goods alone. Including services and income in the analysis alters the picture, particularly on account of intra-group service flows resulting from direct investment by US multinationals in Europe. <p> Dans le contexte du durcissement récent de la politique commerciale américaine, limiter l’analyse des flux financiers entre les États-Unis et la zone euro liés au seul commerce de biens est réducteur. Intégrer services et revenus dans l’analyse change le constat, notamment du fait des flux de services intra-groupe, résultant eux-mêmes d’investissements directs des multinationales américaines en Europe. |
| Date: | 2026–04–21 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:econot:446 |
| By: | Mr. Christian Bogmans; Francis Cuadros-Bloch; Jean-Marc Natal; Andrea Paloschi |
| Abstract: | Recent supply shortages have intensified concerns about supply chain bottlenecks, prompting policymakers to adopt industrial policies to promote reshoring and friendshoring. Nowhere are these concerns more evident than in rare earth element (REE) markets, where supply chains are highly concentrated across stages, particularly refining. This paper quantifies the costs of reducing supply chain concentration using a dynamic global trade model calibrated with detailed market, industry and geological data. In the model, upstream (mining) and downstream (refining) production is slow-moving and determined by investment in capacity (CAPEX). We evaluate how different policies can raise U.S. downstream REE self-sufficiency from 10 to 25% by 2035, comparing CAPEX subsidies and price floors under unilateral and coordination action among importers. The fiscal cost of downstream unilateral CAPEX subsidies reaches 141% of the annual U.S. REE market (about $1.2 billion) by 2035, and falls to 96% under coordinated action. Downstream price floor policies are equally effective, but more fiscally inefficient. Despite their size relative to the market, absolute fiscal costs are contained, suggesting that de-risking REE supply chains is fiscally feasible. |
| Keywords: | Industrial Policy; Trade Restrictions; Rare Earths; Global Supply Chains |
| Date: | 2026–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/072 |
| By: | Yonggeun Jung |
| Abstract: | Satellite data are increasingly used to measure economic activity, yet port-level trade remains largely unmeasured from space. This paper combines synthetic aperture radar imagery, nighttime lights, and port characteristics to measure monthly port-level maritime trade using only publicly available data. The model achieves strong out-of-sample accuracy for U.S. ports, with satellite signals and port attributes playing complementary roles. While absolute levels are difficult to extrapolate beyond the training domain, percentage changes are reliably recovered, as we confirm through a leave-one-region-out exercise and Monte Carlo simulation. Applying the framework to Russian ports after the 2022 sanctions, we detect shifts consistent with trade reorientation toward the Far East. The approach complements AIS-based methods by remaining robust to strategic signal manipulation. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2604.15444 |
| By: | Michele Battisti (University of Palermo); Antonio Francesco Gravina (University of Messina); Matteo Lanzafame (Asian Development Bank) |
| Abstract: | Structural transformation is widely recognized as a key driver of productivity growth and economic development, with industrial policies often playing a crucial role in this process. However, the challenge of premature deindustrialization—where economies experience a decline in manufacturing’s share of employment and gross domestic product at lower levels of income than historically observed in advanced economies—threatens to undermine these gains, particularly in developing economies. This paper provides a comprehensive overview of the literature on structural transformation and modern industrial policy, with a particular focus on Asia, a region characterized by economies at considerably different stages of development. Our research encompasses a review of current empirical methodologies for measuring structural transformation and its relationship with growth patterns; an examination of the evolution of industrial policy approaches in Asia; and a synthesis of available evidence on premature deindustrialization, highlighting variations across Asian subregions and policy implications. Additionally, we contribute to the existing literature by presenting new stylized facts on structural transformation and growth patterns in Asia, based on various indicators across economies and sectors. We also examine how institutional and economic factors—including financial sector development, public investment, and labor market regulations—correlate with indicators of structural transformation. Our analysis reveals key insights, including the strong link between manufacturing predominance and labor productivity growth; complex productivity–employment dynamics across sectors; and differentiated impacts of financial development, public investment, and labor market regulations on sectoral employment shifts. |
| Keywords: | structural transformation;economic growth;deindustrialization;industrial policy;Asia |
| JEL: | O11 O14 O25 |
| Date: | 2025–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:022439 |