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on International Trade |
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Issue of 2026–09–28
twelve papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Farris, Jarrad; Morgan, Stephen |
| Abstract: | Using tariff data from the World Trade Organization (WTO), this report compares most favored nation (MFN) applied and bound tariff rates between the United States and more than 150 WTO trading partners for agricultural goods, focusing on comparisons across 10 different commodity groups. Results indicate that the United States imposes lower average agricultural MFN tariffs than more than 90 percent of trading partners. We observe significant levels of variation in agricultural MFN import tariffs across different commodity groups and trading partners. At the commodity level, the largest differences are in live animals and meat; beverages and tobacco; fruits and vegetables; coffee, tea, cocoa, and spices; and cereals and food preparations. Within a commodity group there are significant differences in regional and country-level tariff rates; however, trade agreements may provide a mechanism to improve market access for U.S. exporters. This analysis of MFN rates does not take trade agreements or preferential tariff policies into account; nor does it analyze the prevalence of nontariff measures, which can also represent large barriers to agricultural trade. |
| Keywords: | International Relations/Trade |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:ags:uersib:413079 |
| By: | Wei Li (Shanghai Jiaotong University); Jie Ouyang (Hong Kong Baptist University); Bin Qiu (Southeast University); Zi Wang (Hong Kong Baptist University); Yuan Zi (Graduate Institute of International and Development Studies) |
| Abstract: | Modern protectionism has increasingly taken the form of decentralized trade coercion rather than multilateral escalation. What tariffs prevail in such local trade wars? How are welfare consequences shared between participants and bystanders? And can targeted economies credibly deter unilateralism? Using a multi-country, multi-sector Armington model that distinguishes the elasticity of substitution between domestic and imported goods from that across foreign varieties, we show that bilateral tariffs generate substantial third-market leakage. Applied to recent U.S. trade policy, this leakage magnifies U.S. losses and bystander gains under Trump 1.0, with bilateral Nash tariffs that are lower but more costly than those implied by standard models with a uniform trade elasticity. Trump 2.0's Liberation Day tariffs reverse these patterns by largely shutting down third-market leakage through broad-based tariff escalation. In a dynamic setting, no individual trading partner can credibly deter U.S. unilateralism: bilateral retaliation is either too weak or too costly. Only a near-universal coalition, broadly resembling the WTO membership, can flip U.S. incentives. |
| Keywords: | Local Trade Wars; Third-Market Leakage; Bilateral Tariffs; Unilateral Protectionism; Strategic Deterrence |
| JEL: | F10 F13 F14 |
| Date: | 2026–09–18 |
| URL: | https://d.repec.org/n?u=RePEc:gii:giihei:heidwp26-2026 |
| By: | Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper develops a theoretical and empirical framework for analysing how technological proximity shapes bilateral trade flows. We model technological alignment as a source of reduced effective trade costs and embed it within a structural gravity setting. Using a novel dataset combining sector-level patent information and OECD trade data for 76 countries across 45 sectors over the 1996-2020 period, we construct a granular measure of technological proximity based on revealed technological advantage. Estimating high-dimensional fixed effects gravity models, we find that technological proximity has a positive and economically significant impact on bilateral exports. Instrumental-variable estimates based on shift-share global technology shocks indicate that baseline results are attenuated by endogeneity. We further show that technological proximity mitigates the trade-reducing effects of compliance-intensive regulatory non-tariff measures, particularly sanitary and phytosanitary measures, while having limited interaction with tariffs. In non-services sectors, a 0.1 increase in technological proximity has an export effect comparable to lowering the gross tariff factor by about 6%-7%. Finally, we document substantial regional and sectoral heterogeneity, showing that the trade-enhancing effects of technological proximity are strongest when countries are connected to technological frontier economies and vary markedly across industries. Partial-equilibrium welfare counterfactuals imply positive but modest gains from targeted technological-alignment shocks. The findings highlight the central role of technological compatibility in shaping global trade patterns. |
| Keywords: | technological proximity, international trade, structural gravity, revealed technological advantage, non-tariff measures, trade policy, patent data, global value chains |
| JEL: | F13 F14 O33 O14 C23 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:279 |
| By: | Bekkers, Eddy; Kalachyhin, Hryhorii; Humphreys, Lee |
| Abstract: | We present four stylized scenarios for the future of global trade policy cooperation: (i) Restructuring, (ii) Geo-Fragmentation; (iii) Breakdown; (iv) Reform. The four scenarios include different trajectories of tariffs, trade policy uncertainty, operational trade costs, and digital trade policies. A quantitative trade model is employed to simulate the long-run economic impacts on trade, output, production structure, and welfare. The simulations show that there is a lot at stake. Whereas a breakdown of global trade policy cooperation can lead to almost double-digit economic losses, reform scenarios can substantially raise global GDP (by 2%-3%). Restructuring and Geo-Fragmentation would reduce global GDP substantially by respectively about -1% and -6%. For most economies, Reform generates better welfare outcomes than Restructuring. There is large variation in economic effects across regions, and outcomes vary between regions across scenarios. |
| Keywords: | Quantitative trade modeling, Trade policy, Fragmentation, Scenario Analysis |
| JEL: | F13 F17 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wtowps:343990 |
| By: | Santoni, Gianluca; Taglioni, Daria; Artuso, Fabio; Clarke, Julian |
| Abstract: | Integration into global value chains can drive rapid industrialization without necessarily building the technological capabilities needed for sustained upper-middle-income growth. Using Thailand as a diagnostic case and global country–product–year data, we link PATSTAT patent and citation records to HS6 trade flows through a probabilistic technology–product concordance and derive a structural-gravity measure of export capability. Three findings emerge. First, Thailand’s established manufacturing export base coexists with an innovation base concentrated in applied, downstream activities rather than upstream and science-intensive technologies. Second, innovation intensity is positively associated with exports and export capability, particularly in digital and semiconductor products. Third, in the log-export interactions, this relationship is stronger where human capital and logistics perform better and, in several technology-intensive product groups, where policy uncertainty is lower. Evidence from Thai electric-vehicle and electronics producers identifies certification, customs and logistics, documentation, skills, and dependence on external partners—rather than tariffs—as practical constraints on capability deepening. Although the results are descriptive rather than causal, they show the complementary conditions under which technological accumulation is more closely connected to export upgrading. For middle-income economies, the challenge after entering global value chains is therefore to build the domestic capabilities and institutions needed to move beyond assembly and sustain productivity growth. |
| Date: | 2026–09–14 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11447 |
| By: | Brancati, Emanuele (Sapienza University of Rome); Brianti, Marco (University of Bologna); Nosal, Jaromir (Boston College); Schiantarelli, Fabio (Boston College) |
| Abstract: | Using the universe of Italian customs from 2000 to 2021, matched to firm balance-sheets, we study how invoicing currency shapes exchange-rate exposure and profitability for two-sided trading firms. We document four facts. First, when a firm begins invoicing imports in dollars, it becomes far more likely to invoice exports in dollars the same year, with import-side adoption leading. Second, this matching is bilateral: a firm importing from a country in dollars disproportionately invoices exports to that country in dollars, a corridor structure that aggregate hedging cannot rationalize. Third, corridor alignment reduces profit variance beyond what aggregate net dollar exposure explains. Fourth, exchange-rate movements transmit to profits mainly through transactions rather than balance-sheet revaluation, and dollar-invoiced import quantities rise after a euro depreciation, concentrated in inputs linked to exports. We interpret these facts through a model of invoicing currency choice with a rich sourcing and export destination structure, driven by price-stability motives and the incentive to hedge country-specific risk. In the richest framework, invoicing currency choice is a real hedge against country risk, not only currency risk. |
| Keywords: | invoicing currency, exchange rate pass-through, corporate hedging, firm profitability, exchange rate exposure |
| JEL: | F14 F31 F41 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18943 |
| By: | Lorenzo Bencivelli (Bank of Italy); Alessio Ciarlone (Bank of Italy); Emidio Cocozza (Bank of Italy); Andrea Gerali (Bank of Italy); Andrea Perin (Bank of Italy); Carmine Porello (Bank of Italy) |
| Abstract: | This paper examines the major structural transformations that have been reshaping the global automotive industry since the COVID-19 pandemic. Organized as a series of questions and answers, it analyses key developments across market dynamics, electrification, trade policy, supply chains, and digital technology. The post-pandemic recovery has been strikingly uneven: while China's vehicle sales surpassed pre-pandemic levels, advanced economies - particularly in the European Union - remain significantly below 2019 volumes, reflecting weakened affordability and policy uncertainty. China's rapid rise as the world's largest electric vehicle producer and exporter, driven by sustained industrial policy, battery supply chain dominance, and an estimated 30 to 45 per cent manufacturing cost edge over Western competitors, has fundamentally altered competitive dynamics. European, Japanese, and Korean original equipment manufacturers face mounting pressure from Chinese electrification, trade fragmentation, and the transition to software-defined vehicles, where Chinese firms are estimated to have a two- to three-year lead. US and EU defensive measures-including prohibitive tariffs and countervailing duties-have proved only partially effective, with EU passenger car imports from China rising by nearly 30 per cent in 2025. The paper concludes that diverging industrial, trade, and environmental policies are fragmenting global automotive markets into distinct regional ecosystems, raising costs, complicating investment, and accelerating a structural realignment of competitive advantage. |
| Keywords: | electric vehicles, trade policy, automotive industry |
| JEL: | L62 F13 O33 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bdi:opques:qef_1030_26 |
| By: | Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper draws on a Ricardian model for a small open economy and derives the welfare implications of tariffs. By focusing on three key parameters – (i) the expenditure share on imports, (ii) the degree of tariff pass-through, and (iii) the proportion of tariff revenues spent domestically – the model provides closed-form expressions for welfare, optimal tariff rates, and threshold tariff levels. The analysis explains why the marginal effectiveness of increasing tariff rates declines and might even become negative as well as why real wage income typically diverges from total income when tariff revenues are saved rather than spent. The results indicate that high pass-through of tariffs substantially limits potential welfare gains from tariffs even at the optimal rate. Improvements in the trade balance only arise when tariff revenues are not fully recycled into domestic demand. However, welfare is also lower when the optimal tariff rate is applied in such a case. The framework captures mechanisms consistent with more complex trade models and highlights the narrow range of conditions under which tariff policy can yield positive welfare outcomes. |
| Keywords: | Ricardian trade model, optimal tariffs, pass-through, trade balance |
| JEL: | F13 F17 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:280 |
| By: | Bonin, Simone Maria (Danmarks Nationalbank and Aarhus University); Gorshkov, Andrei (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | We study the transmission of firm-specific export shocks through labor markets, examining how these shocks influence workers’ wages at competing firms via labor market competition. Using rich Danish administrative data, a flexible, empirically driven definition of workers’ outside options, and an identification strategy based on world import demand shocks, we show that both own-firm and competitor export shocks raise incumbent workers’ wages. These export-driven shocks also trigger competitive worker reallocation, as expanding exporters poach workers from other firms. The results indicate spillover effects of export shocks extending to non-exporting firms. |
| Keywords: | labour market competition; export shocks; worker outside options |
| JEL: | F16 J23 J31 J63 |
| Date: | 2026–09–08 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2026_016 |
| By: | Difei Ouyang (School of International Trade and Economics, University of International Business and Economics); Weidi Yuan (Nanjing University and University of Geneva); Yuan Zi (Geneva Graduate Institute and University of Oslo and CEPR) |
| Abstract: | This paper studies how trade affects women's marriage and fertility decisions in China. Exploiting regional variation in the exposure to the U.S. granting of Permanent Normal Trade Relations, we find that more exposed Chinese prefectures experience relative increases in the fraction of unmarried young women and women without children. These shifts in family decisions coincide with a trade-induced increase in female workforce participation and reallocation of women relative to men to the service sector, where wages are higher. Additionally, women in more exposed areas experience greater gender empowerment, as measured by their attitudes toward work, family, and gender equality. |
| Keywords: | trade liberalization; gender inequality; family decisions; Chinese economy |
| JEL: | F16 J12 J13 J16 |
| Date: | 2026–09–18 |
| URL: | https://d.repec.org/n?u=RePEc:gii:giihei:heidwp28-2026 |
| By: | Xiwen Bai (Tsinghua University); Jesús Fernández-Villaverde (University of Pennsylvania); Yiliang Li (Peking University); Ricardo Marto (Federal Reserve Bank of St. Louis); Francesco Zanetti (University of Oxford) |
| Abstract: | We study the macroeconomic and trade-policy implications of disruptions to U.S.-bound shipping routes. Standard models treat them as iceberg-cost shocks, conflating the shock with the response to it. Using satellite vessel-tracking data, we construct route-level measures of potential and effective capacity for all U.S.-bound container ships from 2016 to 2025. Utilization losses in recent disruptions ran 20 to 40 percentage points, and began months before port congestion became visible. We embed these measures in a general equilibrium model in which firms reallocate a common fleet without internalizing the congestion they create and price above marginal cost, while importers’ sourcing responds to route profitability. The reallocation triggered by a disruption then has first-order welfare effects, and the route’s Domar weight is not a sufficient statistic for its welfare cost. The 2021 West Coast crisis and the 2023–2024 Red Sea attacks cost 0.69% and 0.35% of output. Naval protection of Red Sea shipping generated benefits of 0.04–0.08% of output at a fiscal cost of 0.02%. Tariffs decongest the routes they tax, offsetting or even reversing their conventional welfare cost. |
| Keywords: | AIS, shipping disruptions, shipping capacity, maritime transportation, general equilibrium, supply chains, trade policy |
| JEL: | E23 F12 L91 R40 |
| Date: | 2026–09–18 |
| URL: | https://d.repec.org/n?u=RePEc:pen:papers:26-015 |
| By: | Luca Brugnara (Bank of Italy); Gianmarco Cariola (Bank of Italy); Pasquale Recchia (Bank of Italy); Simone Zuccolalà (Bank of Italy) |
| Abstract: | This paper develops a firm-level input–output framework to measure participation in production networks using transaction-level data and applies it to the automotive industry. Using a novel dataset of firm-to-firm transactions, we construct a firm-specific measure of supply chain exposure based on the Ghosh inverse, which is a sufficient statistic for the upstream propagation of demand shocks within a standard production network model. We use this framework to trace both direct and indirect sales linkages across firms. We find that around 8, 000 Italian firms are significantly exposed to the EU automotive industry, with indirect linkages accounting for more than half of the supply chain. Exposure is highly heterogeneous across firms, sectors, and regions, and simulated demand shocks generate sizeable upstream propagation effects: a 1 per cent decline in final demand for cars would reduce value added among final producers by 63 million euros, with an additional 93 million propagating upstream through the network. The framework is scalable and can be extended to other downstream industries with clearly identifiable final producers, providing a flexible tool for analysing production networks and the upstream transmission of demand shocks. |
| Keywords: | production networks, firm-to-firm transaction data, shock propagation, automotive industry |
| JEL: | D57 L14 L62 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bdi:opques:qef_1041_26 |