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on International Trade |
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Issue of 2026–05–04
fourteen papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Lucas Bertinatto; Lissette Briones; Jorge Fornero |
| Abstract: | This paper examines the short- and long-term effects of tariffs on Chilean exports using a novel micro-level panel from 2003 to 2024. The dataset includes firm-level exports by product and destination, tariffs, and macroeconomic controls. A relative tariff measure captures trade diversion. We find that a 10 percentage points increase in destination-country tariffs leads to a 5.9% drop in bilateral exports in the second year, focusing on the intensive margin. This effect is partially offset by the increase in shipments to other destinations. Findings are heterogeneous across sectors. Tariffs significantly reduce export levels, with results robust to alternative specifications, including Free Trade Agreements (FTA) controls. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:chb:bcchwp:1065 |
| By: | Ana Abeliansky (Oesterreichische Nationalbank); Inmaculada Martinez-Zarzoso (University of Goettingen); Anna Katharina Raggl (Oesterreichische Nationalbank, Foreign Research Division) |
| Abstract: | This paper reexamines the trade creation effects of migration using a large sample of 180 countries from 1995 to 2023. We estimate a structural gravity model of bilateral trade augmented with migration stocks, investigating whether immigration to OECD countries relates to the extensive and intensive margins of trade. To address potential endogeneity, we apply a two-step control function approach based on a first-stage gravity model of migration that exploits bilateral and time variation in migration regularization policies across OECD countries. Results obtained using PPML estimators show robust pro-trade effects of migration through the extensive margin, with non-linearities and heterogeneity across product types. The findings show that migration primarily fosters exports of new, differentiated products, while effects on the intensive margin are weaker for different types of goods. These results stress the role of migrant networks as facilitators of new trade relationships and highlight policy implications for migration and trade integration. |
| Keywords: | immigration; trade margins; extensive margin; gravity model; PPML; CFA; expectiles; OECD |
| JEL: | F10 F14 F22 |
| Date: | 2026–03–13 |
| URL: | https://d.repec.org/n?u=RePEc:onb:oenbwp:275 |
| By: | William R. Cline (Peterson Institute for International Economics) |
| Abstract: | President Donald Trump's Global Tariff War has discarded US commitments to the postwar international trading order established under the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). It replaces the Most Favored Nation (MFN) principle with an "Every Nation Different" principle under the false premise that any economy with a trade surplus against the United States must be cheating on its trade obligations and imposes a "reciprocal" tariff increase based on the ratio of bilateral US imports to exports. It fails to recognize the role of US fiscal deficits in boosting demand for imports, and of the attractiveness of the US capital market to inflows of foreign capital in strengthening the dollar and contributing to a persistent trade deficit. The Trump Global Tariff War promises revival of US manufacturing jobs under the false premise that trade deficits rather than technological change and Engel curve shifts in demand toward services have driven the decline in the share of manufacturing in employment and GDP. It shows no recognition that higher tariffs are a self-inflicted wound to the economy because of large static welfare triangle costs and loss in dynamic efficiency growth. This study estimates that the 18 percent rise in tariffs so far in the Trump Global Tariff War imposes an ongoing future static welfare cost of 0.28 percent of GDP. The medium-term dynamic efficiency loss brings the total welfare loss reaching a range of 1.1 to 2.3 percent of baseline GDP by 2035. Congressional Budget Office budget estimates of increased tariff revenues of 1 percent of GDP over the next decade (including interest savings) may be understated on an implied premise of sharp import reductions but overstated because President Trump has suggested giving them away in "tariff dividend" checks to all but high-income households. Moreover, a possible Supreme Court ruling against application of the "emergency" legislation on which the main tariff increases are based further reduces the reliability of revenue estimates. The Trump Global Tariff War has usefully revealed a vulnerability of the US economy to a future cutoff in the supply of rare earth minerals, metals, and magnets imported from China that requires urgent action. |
| Keywords: | tariffs, trade war |
| JEL: | F02 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iie:wpaper:wp25-23 |
| By: | Chad P. Bown (Peterson Institute for International Economics) |
| Abstract: | The United States and China put parts of the global economy at risk in 2025 through their trade war over critical minerals and technology. A series of escalatory tariffs and export restrictions led to shortages of essential inputs, nearly forcing automakers worldwide to shut down production. The costly policies reflected uncoordinated and uncommunicated efforts by both countries to reduce their mutual economic dependence. This paper explores a novel path for the United States and China to "cooperate" over how they reduce their dependence on each other in technology and critical minerals, with the aim of limiting future escalation risks and avoiding unnecessary costs. The proposal draws on a version of the reciprocal approach to negotiations developed under the General Agreement on Tariffs and Trade, modified to accommodate a mutual reduction in each country's market dominance in key sectors. |
| Keywords: | economic security, supply chains, tariffs, export restrictions |
| JEL: | F51 F52 F53 F13 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iie:wpaper:wp26-5 |
| By: | Meng Yu Ngov; Pierre-Louis Vézina; Trang Thu Tran; Gaurav Nayyar |
| Abstract: | We document how foreign firms, inputs, and subsidies have shaped the development of Viet Nam's solar panel industry. We use firm-to-firm transaction data from Panjiva as well as firm-level data from the Vietnamese Enterprise Survey to trace solar panel value chains. We uncover three key findings: First, parts and components from subsidizing countries are 30% cheaper than alternatives. Those from China, which provides the majority of solar inputs to Vietnamese producers, are cheapest. Foreign subsidies may thus spill over across countries via value chains. Second, Chinese FDI firms dominate Viet Nam's solar industry, accounting for 75% of exports and 50% of jobs, while exporting solar panels that are 38% cheaper than those of other producers in Viet Nam. Third, local firms supplying parts and components to these Chinese FDI firms experience positive productivity gains. Our findings show how Viet Nam's solar boom emerged through deep integration into China's subsidized supply chains. |
| Keywords: | global value chains, green subsidies, FDI |
| JEL: | F14 F23 Q42 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25138 |
| By: | Taguchi, Hiroyuki; Lar, Ni |
| Abstract: | This study aims to quantify the contribution of services trade restrictions to underdevelopment of servicification in global value chains (GVCs) in Asian economies, while this topic was rarely explored in previous research. For the methodology and data, the study applies the “structural” gravity trade model and uses the panel data based on the database of Trade in Value Added (TiVA) 2023 edition and Services Trade Restrictiveness Index (STRI) developed by the Organization for Economic Cooperation and Development (OECD). The services sectors cover five categories: trade, transport, information and communication (I & C), finance, and professional. The main findings are: first, servicification in GVCs is less progressed in most of emerging and developing Asian economies and in most of services categories; second, services trade restrictions have negative impacts on servicification in GVCs; and third, the negative contributions of services trade restrictions on underdevelopments of servicification in GVCs account approximately for 30-50% except for the I & C category. The policy implication of the estimation results is that there should be much room to extend GVC servicification in emerging and developing economies Asian economies through removing the restrictions. |
| Keywords: | servicification; global value chains; services trade restrictions; Asian economies |
| JEL: | F14 Q53 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128815 |
| By: | Bonilla, Leonardo (Banco de la República); Munoz-Morales, Juan (IESEG School of Management); Zarate, Roman (UCSD) |
| Abstract: | This paper examines how import liberalization affects labor markets when labor and intermediate inputs can act as complements or substitutes. We incorporate a CES production function into a dynamic quantitative trade model and show that the labor market effects of imports depend on the elasticity of substitution between labor and intermediate inputs, which varies across sectors. Exploiting exogenous tariff reductions in Colombia and applying a difference-in-differences strategy, we separate the reduced-form effects of trade into an input shock and a competition shock. Import competition reduces the wage bill across sectors, whereas cheaper intermediate inputs increase it. This increase is driven by the service sector, with imprecise effects in manufacturing and an opposite-sign effect in agriculture. Combining the model with the reduced-form parameters, we implement indirect inference to recover sector-specific elasticities of substitution and find that labor and intermediates are substitutes in agriculture and manufacturing but complements in services. Allowing for a more flexible production structure meaningfully changes the labor market response to trade. |
| Keywords: | trade liberalization, import competition, foreign inputs, employment, earnings |
| JEL: | J21 J30 F14 O15 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18558 |
| By: | Koller, Julian; Stefanova, Stefani |
| Abstract: | We propose a novel spatial IV approach to estimate inter-regional employment spillovers from local trade shocks and apply it to the surge of Chinese import competition in the U.S. We find strong spillovers at the local level that substantially reshape the geography of the shock's employment burden. Our results further suggest that these indirect effects propagate through input-output linkages rather than labor mobility. Moreover, we show that our estimates rationalize the roughly 30 percent gap between Autor et al. (2013) and the structural follow-up literature in the aggregate U.S. manufacturing employment decline attributed to Chinese import competition. |
| Keywords: | Trade Shocks, Local Labor Markets, Import Competition |
| JEL: | F10 F14 F16 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128159 |
| By: | Sascha O. Becker; Hartmut Egger; Michael Koch; Marc-Andreas Muendler |
| Abstract: | This paper links globalization, worker efficiency, and wage inequality within plants to internal labor market organization. Using German plant-worker data and information on the task content of occupations, we document that larger plants (i) use more occupations, (ii) assign fewer tasks per occupation, and (iii) exhibit greater wage dispersion. We develop a model where plants endogenously bundle tasks into occupations, improving worker-task matching at the cost of higher fixed span-of-control costs. Embedding this into a Melitz framework, we show that trade increases worker efficiency and wage inequality in exporting plants, whereas non-exporting plants experience the opposite effects. Structural estimation and simulations confirm the model's predictions and point to non-monotonic economy-wide effects. |
| Keywords: | Tasks; specialization; international trade; firm-internal labor allocation |
| JEL: | F12 F16 J3 L23 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25135 |
| By: | Alex Imas; Kristof Madarasz; Heather Sarsons |
| Abstract: | This paper presents a new framework for understanding economic nationalism based on an empirically-validated desire for mimetic dominance (or desire through dominance), which generates a preference for exclusionary policies. We incorporate such preferences into a model of international trade. The model predicts that exclusionary preferences lead people to favor tariffs and protectionist policies that harm both their trading partner's and their own consumption. This implies that higher prices caused by exclusionary policies like tariffs will be more acceptable than those caused by non-exclusionary policies. We provide support for these predictions through two survey experiments, which also account for the role of cognitive biases and misinformation. |
| Keywords: | tariffs, behavioral preferences, trade, superiority |
| JEL: | D91 D7 F19 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25124 |
| By: | Alexander Bertermann; Wolfgang Dauth; Jens Suedekum; Ludger Woessmann |
| Abstract: | How do firms and workers adjust to trade and technology shocks? We analyze two mechanisms that have received little attention: training that upgrades skills and early retirement that shifts adjustment costs to public pension systems. We combine novel data on training participation and early retirement in German local labor markets with established measures of exposure to trade competition and robot adoption. Results indicate that negative trade shocks reduce training-particularly in manufacturing-while robot exposure increases training-particularly in indirectly affected services. Both shocks raise early retirement among manufacturing workers. Structural change thus induces both productivity-enhancing and productivity-reducing responses, challenging simple narratives of labor market adaptation and highlighting the scope for policy to promote adjustment mechanisms conducive to aggregate productivity. |
| Keywords: | training, retirement, trade, technological change, automation, robots, firms, workers, labor market |
| JEL: | J24 J26 O33 F16 R11 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25139 |
| By: | Sebastian Galiani; Ivan Lopez Cruz; Alessandra A. Palazzo; Gustavo Torrens |
| Abstract: | This paper analyzes a central colonial institution: the monopolization of foreign trade through exclusive trading companies. We interpret this arrangement as an economic institution that creates a wedge between domestic and international prices—effectively an export tax—allowing metropolitan intermediaries to extract rents from colonial trade. Our primary theoretical contribution demonstrates that the economic and political consequences of this institutional form depend systematically on the structure of comparative advantage between the metropolis and the colony. While colonial export taxation unambiguously worsens the colony’s effective terms of trade, its effect on the metropolis is conditional. When the colony and metropolis are competitors—sharing a comparative advantage in the same sector—a colonial export tax can improve the metropolis’s terms of trade. Conversely, when they are complementary—specializing in different sectors—the same policy can deteriorate the metropolis’s terms of trade by raising the cost of imported inputs. Because these terms-of-trade movements generate distinct distributive effects, the colonial monopoly reshapes political coalitions within the metropolis, influencing whether exclusive trading companies persist or are dismantled. We formalize this mechanism in a parsimonious general equilibrium model and illustrate it through the historical experience of Great Britain, India, and the East India Company (EIC), presenting the EIC as a salient instance of a broader institutional logic. |
| JEL: | D74 N41 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35121 |
| By: | Rocco Macchiavello; Josepa Miquel-Florensa; Nicolas de Roux; Eric Verhoogen; Mario Bernasconi; Patrick Farrell |
| Abstract: | Do the returns to quality upgrading pass through supply chains to primary producers? We explore this question in the context of Colombia's coffee sector, in which market outcomes depend on interactions between farmers, exporters (which operate mills), and international buyers, and contracts are for the most part not legally enforceable. We formalize the hypothesis that quality upgrading is subject to a key hold-up problem: producing high-quality beans requires long-term investments by farmers, but there is no guarantee that an exporter will pay a quality premium when the beans arrive at its mills. An international buyer with sufficient demand for high-quality coffee can solve this problem by imposing a vertical restraint on the exporter, requiring the exporter to pay a quality premium to farmers. Combining internal records from two exporters, comprehensive administrative data, and the staggered rollout of a buyer-driven quality-upgrading program, we find empirical support for the key theoretical predictions, both the lack of pass-through of quality premia under normal circumstances and the possibility of a buyer-driven solution through a vertical restraint. Calibration of the model suggests that one-third to two-thirds of the (substantial) gains from the program accrue to farmers, with the vertical restraint playing a critical role. The results are consistent with the hypotheses that quality upgrading can provide a path to higher incomes for farmers, but also that it is unlikely to be viable under standard market conditions in the sector. |
| Keywords: | Quality Upgrading, Relational Contracts, Vertical Restraints, Buyer-Driven Voluntary Standards. |
| JEL: | O12 F61 L23 Q12 Q13 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25167 |
| By: | Bargain, Olivier (University of Bordeaux); Jara, H. Xavier (London School of Economics); Magejo, Prudence (University of the Witwatersrand); Ntuli, Miracle (University of the Witwatersrand) |
| Abstract: | Market forces, and notably the role of trade openness, contribute to shaping inequality in South Africa and may limit the inclusiveness of its growth path. Recently, policy reforms may have helped to mitigate these effects. To better understand these developments, we analyze trends in post-tax income inequality using matched employer-employee administrative data from 2012 to 2021 and an original decomposition based on counterfactual tax microsimulations. Our results show that the benefits of increased trade openness during this period has benefited top earners essentially, while other workers - particularly those in the middle class - were adversely affected. This inequality-enhancing impact was partially offset by the automatic stabilizing response of the personal income tax system and by reforms that increased its progressivity. Overall, the analysis highlights the critical role of fiscal policy in counteracting inequality arising from labor-market disparities linked to globalization. |
| Keywords: | trade, inequality, taxation, decomposition |
| JEL: | F16 F6 H24 I3 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18551 |