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on International Trade |
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Issue of 2026–06–29
ten papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Pao-Li Chang (School of Economics, Singapore Management University); Ruoqing Chen (School of Economics, Singapore Management University); Lin Ma (School of Economics, Singapore Management University) |
| Abstract: | The SMU Trade Dashboard (https://economics.smu.edu.sg/soetrade/trade-dashboard), developed by the SMU Center for Research on International Trade, consists of Tariff Tracker and Trade Simulation functions. The Tariff Tracker allows users to track the tariff applicable to an HS 6-digit product or an ISIC 2-digit sector by markets and country origins. The Trade Simulation presents quantitative simulation results of the effects of Trump II tariffs (and the associated tariff responses by its trading partners) on trade flows, welfare, and wages. This companion paper documents the methodologies underlying the tariff data collection protocol and the structural simulation designs. |
| Date: | 2026–03–21 |
| URL: | https://d.repec.org/n?u=RePEc:ris:smuesw:022914 |
| By: | Ferracane, Martina F.; van der Marel, Erik; Olarreaga, Marcelo |
| Abstract: | We provide estimates of regulatory restrictiveness in digital trade for 152 countries in the year 2022. Using the regulatory information in the Digital Trade Integration (DTI) Database, we assess regulatory trade restrictiveness across 12 pillars that capture regulations and practices affecting trade in ICT goods and digitally deliverable services, comprising 65 indicators. Building on the scores and weights assigned to each entry in the DTI database, we construct a Digital Trade Restrictiveness Index (DTRI) to aggregate the information contained in the 12 pillars into a single country-level measure using a theory-consistent methodology, with each pillar weighted by its estimated impact on digital trade flows. The DTRI can be interpreted as the weighted average level of regulatory restrictiveness across the 12 pillars that would leave digital trade imports unchanged, with higher scores reflecting lower trade integration and higher frictions. The DTRI is negatively correlated with income per capita, governance indicators, and the depth of existing regional trade agreements, and positively correlated with population size. Interestingly, in high-income countries, DTRI is driven by the import restrictiveness of digitally delivered services, and in low-income countries, by the restrictiveness of imports of ICT goods. |
| Keywords: | Trade restrictions; Trade policy; Data restrictions; Digital services |
| JEL: | F13 F68 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21599 |
| By: | Tyazhelnikov, Vladimir; Shi, Xuetao; Zhou, Xinbei |
| Abstract: | We revisit the gravity equation, the most widely used empirical tool in international trade, and show that common estimators recover distinct parameters when trade elasticities are heterogeneous: Poisson pseudo-maximum likelihood (PPML) estimates the aggregate elasticity, while ordinary least squares (OLS) and Gamma PML estimate the average elasticity. We demonstrate that, contrary to common belief, differences between OLS and PPML estimates are driven primarily by elasticity heterogeneity rather than heteroskedasticity of an error term or inclusion of zero trade flows. We develop a simple test for heterogeneity and, applying it to disaggregated trade data, reject homogeneity in at least 57% of industries. We then introduce a weighted PPML (WPPML) estimator to recover the aggregate effects of arbitrary, non-uniform shocks. Using WPPML, we show that trade flows respond less to realized tariff reductions from 2001-2016 than to uniform liberalization, reflecting systematic selection in where barriers fall, with substantial variation across industries. |
| Keywords: | Elasticity, heterogeneity, heteroskedasticity, gravity model, misspeci cation |
| JEL: | C13 C21 C50 F10 F14 |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128379 |
| By: | Casey, Gregory; Meng, Kyle C.; Rudik, Ivan (Cornell University) |
| Abstract: | Carbon import tariffs, traditionally considered a complement to domestic climate policy, are increasingly proposed as standalone policies. We build a quantitative trade model to compare U.S. carbon tariffs with and without a domestic carbon tax, each applied to a set of carbon-intensive, trade-exposed sectors. We find three main results. First, a U.S. carbon tariff increases U.S. emissions, lowers foreign emissions, and on net achieves half the global emissions reductions of the combined policy, which lowers both U.S. and foreign emissions. Second, both approaches increase U.S. GDP and welfare, but the combined policy has a larger effect due to terms of trade improvements. Third, global emissions reductions from multilateral tariff-only agreements are modest and do not increase monotonically with greater membership, whereas under combined policies they scale considerably with membership. |
| Date: | 2026–06–09 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:3aw8s_v1 |
| By: | Amodio, Francesco (McGill University); Chiovelli, Giorgio (Universidad de Montevideo); Frache, Serafin (Universidad de Montevideo) |
| Abstract: | We show that commodity export booms can propagate up the value chain, reshape production networks, and drive growth and transformation in the service sector. We study Uruguay’s beef export boom to China in the 2010s, combining customs, firm-to-firm transactions, employer-employee, and balance sheet data. Domestic suppliers to beef exporters that expanded trade with China recorded higher sales, especially in services, with associated gains in employment, wages, and sales per worker, along with increased imports of high-quality products. Aggregate sales in the economy rose by 1.79%, with each export dollar generating 46 more cents in domestic sales, including 10 cents in services. Over time, service firms reoriented their connections toward beef exporters, amplifying their gains from trade. |
| Keywords: | commodity exports, production network, services, China shock |
| JEL: | F14 L14 O14 O54 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18703 |
| By: | Christoph Böhringer; Isha Dube; Carolyn Fischer; Thomas F. Rutherford |
| Abstract: | To address concerns about competitiveness and carbon leakage, countries with ambitious climate policies are increasingly looking to combine unilateral carbon pricing with border carbon adjustments (BCA). BCA aim to create a level playing field between domestically regulated energy-intensive and trade-exposed industries and their competitors abroad by imposing charges on the (unpriced) carbon embodied in imports and (potentially) rebating carbon costs on exports. At the same time, BCA are seen as measures that may have protectionist motivation and shift the burden of climate policy onto poorer developing economies that bear less historical responsibility for climate change, have limited financial and technological capacity for decarbonization, and may depend on CO₂-intensive exports. For an informed policy debate, understanding how BCA alter the economic burden of unilateral emissions pricing across all countries is essential. However, quantitative impact estimates derived from ex-ante simulation analyses vary considerably in the applied economic literature due to divergent assumptions on key drivers whose relative importance is difficult to distinguish from the outset. Based on controlled simulations with a large-scale computable general equilibrium model of global trade and carbon use, this paper provides a systematic sensitivity analysis of three fundamental dimensions that determine the impacts of BCA: (i) the policy design of BCA; (ii) the price responsiveness of supply and demand; and (iii) the input-output data characterizing initial heterogeneities of production, consumption, and trade patterns across countries. |
| Keywords: | border carbon adjustments, multi-region input-output analysis, computable general equilibrium analysis |
| JEL: | Q58 D57 D58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12751 |
| By: | Maurer, Stephan (UPF Barcelona School of Management); Milsom, Luke (KU Leuven); Rauch, Ferdinand (University of St. Gallen) |
| Abstract: | We use a parsimonious gravity framework to simulate and compare five potential shocks to the global shipping system: closures of the Panama Canal, the Suez Canal, and the Strait of Malacca, and openings of the Northwest Passage and a hypothetical Kra Canal. Applying a single, consistent methodology across all five scenarios allows relative comparisons. Using carefully measured seaborne distances between ports under each hypothetical geography, we find that a Panama closure would be the most consequential shock, reducing global trade by nearly 3% compared to a default gravity prediction, followed by Suez (2.5%), Malacca, (1.7%), a Kra opening (+0.7%), and the Northwest Passage (+0.6%). Aggregate GDP and welfare effects are more muted, but show sizable heterogeneity across countries. For example, Panama loses over 9% of GDP from a Panama closure, Egypt and Sudan over 5% from Suez, and Malaysia over 4% from Malacca. |
| Keywords: | gravity, Panama, Suez, Kra, Malacca, Northwest Passage |
| JEL: | F14 F17 O18 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18693 |
| By: | Keita Abe; Renato Molina; Kenta Tanaka; Juan Carlos Villaseñor-Derbez |
| Abstract: | Extreme weather is becoming more frequent and severe worldwide, yet its consequences for global trade channels remain an open question. This paper quantifies the cost of extreme weather to maritime trade. Integrating daily typhoon wind-swath data with hundreds of thousands of vessel voyages in Japanese waters, we document that maritime traffic falls by up to roughly 50% on typhoon-exposed open-ocean cells and by about 7% at typhoon-exposed ports. A voyage-level framework identifies $119 million in direct shipping-industry costs over 2013–2021. This disruption implies a total trade-volume welfare loss of $117.8 million. Combining the two channels yields a central total welfare estimate of approximately $237 million. As climate change intensifies, the invisible costs associated with increased extreme weather will scale accordingly, highlighting a vital dimension of climate risk that remains overlooked by adaptation frameworks focused solely on catastrophic land-based destruction. |
| Keywords: | typhoons, maritime shipping, trade costs, natural disasters, Japan, AIS data |
| JEL: | F14 F18 Q54 R41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12746 |
| By: | Christopher Clayton; Matteo Maggiori; Jesse Schreger |
| Abstract: | Great powers, like the United States and China, use existing trade and financial linkages of their economies to the rest of the world to exert geoeconomic power. The targeted entities include both foreign governments and foreign private firms. We characterize conditions under which a hegemonic country optimally targets private entities or their government in a given targeted foreign country. An advantage of coercing private entities is that they internalize less than their own government the equilibrium consequences of acquiescing to the hegemon's coercion. This allows the hegemon to build its power by exploiting the difference between the private cost to the targeted entity of the costly actions it demands and the social value to the hegemon of those actions. Coercing the government gives up some of this advantage, but offers the ability of having the targeted government potentially influence firms in its domestic economy that the hegemon finds valuable to coerce but for which it had limited direct coercive power. The relative strength of these two channels determines the optimal mix of coercion targeted at private entities and governments. |
| JEL: | F1 F30 G1 H10 P0 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35343 |
| By: | Francesco Crespi; Nicolò Geri; Dario Guarascio; Enrico Marvasi |
| Abstract: | This paper investigates the relationship between technological capabilities, import dependency, and environmental policies, focusing on the lithium-ion battery supply chain, a critical sector for the net-zero transition. First, we develop an original analytical framework that integrates two recent streams of literature, one focusing on the acceleration of the green transition and the other on structural dependencies and technological sovereignty, to examine potential trade-offs between these objectives. Second, we develop a strategic intelligence analysis of the lithium-ion battery supply chain, allowing us to quantify import dependencies and technological capacity gaps at a highly granular product and technology level. Third, we examine how technological capabilities influence import dependency, showing under what conditions technological upgrading strengthens competitive positions and mitigates dependency. Finally, we analyse how environmental policy stringency relates to import dependency. Our findings suggest that technological upgrading can reduce dependencies without compromising environmental goals, so that the presumed trade-off between the net-zero transition and structural dependencies does not necessarily hold. In contrast, a well-designed policy mix, aligning environmental objectives with targeted innovation and industrial policies, can enhance both resilience and the acceleration towards the net-zero transition. |
| Keywords: | strategic dependencies, net-zero transition, lithium-ion batteries, import dependency, technological capabilities, environmental policy stringency |
| JEL: | F14 F18 O13 O33 Q55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ter:wpaper:00199 |