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The impact of trade tensions on Switzerland: A quantitative assessment

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  • Laurence Wicht

Abstract

This paper quantifies the impact of trade tensions between the United States and China. Using a general equilibrium Ricardian trade model, it provides a Swiss-centric analysis of two tariff escalation shocks. Counterfactual analysis shows that welfare and trade effects are broadly negative for the United States and China. In contrast, both tariff escalation shocks could lead to a small increase in real GDP in Switzerland. The labor productivity of Swiss manufacturing sectors increases slightly, especially in sectors that are well-connected to China. While trade collapses between the United States and China, Swiss real exports to the United States in selected sectors increase significantly.

Suggested Citation

  • Laurence Wicht, 2019. "The impact of trade tensions on Switzerland: A quantitative assessment," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 70(01), pages 1-34, December.
    • Handle: RePEc:usg:auswrt:2019:70:01:1-34
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    Cited by:

    1. Dr. Laurence Wicht, 2020. "A multi-sector analysis of Switzerland's gains from trade," Working Papers 2020-20, Swiss National Bank.

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    More about this item

    Keywords

    gains from trade; tariffs; trade wars;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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