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When tariffs demonstrate effectiveness: Evidence from MENAT countries

Author

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  • Bousnina, Rihab
  • Benayed, Walid
  • Gabsi, Foued Badr

Abstract

This study explores the nonlinear relationship between tariff barriers and current account balances across 13 Middle East, North Africa, and Turkey (MENAT) economies, using panel data from 2006 to 2023. Applying quadratic regressions and the Lind and Mehlum (2010) test, we confirm a U-shaped relationship between tariff barriers and the current account. This pattern emerges from an inverted U-shaped import-tariff dynamic and a U-shaped export-tariff dynamic. Specifically, we find that at lower tariff levels, increases in tariffs initially exert a detrimental effect on the current account balance, whereas at higher levels, the impact becomes beneficial. The estimated threshold of 11.6% delineates a pivotal point where increased tariffs transition from detrimental to beneficial for the current account balance. Accordingly, MENAT economies could strategically escalate tariffs up to this threshold to foster domestic industry growth and export capacity.

Suggested Citation

  • Bousnina, Rihab & Benayed, Walid & Gabsi, Foued Badr, 2026. "When tariffs demonstrate effectiveness: Evidence from MENAT countries," The Journal of Economic Asymmetries, Elsevier, vol. 33(C).
    • Handle: RePEc:eee:joecas:v:33:y:2026:i:c:s1703494926000150
    DOI: 10.1016/j.jeca.2026.e00463
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    Keywords

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    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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