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21st Century Trade Wars

In: POLICY ANALYSIS AND MODELING OF THE GLOBAL ECONOMY A Festschrift Celebrating Thomas Hertel

Author

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  • Edward J. Balistreri
  • Russell H. Hillberry

Abstract

We use the Global Trade Analysis Project (GTAP) data in a GTAP-in-GAMS framework to calculate the economic effects of trade policies proposed by candidate Donald Trump in his successful campaign to become President of the United States. We calibrate a multi-sector multi-regional equilibrium with Melitz (2003) technologies in the manufacturing and business services sectors. We calculate optimal bilateral tariffs against China and Mexico and consider their optimal responses. In a more detailed look at Mexico we consider the 35% US tariff on Mexican imports that Trump proposed during the campaign, and the 20% tariff on Mexican imports that was suggested shortly after he took office. We model optimal Mexican responses as well as responses that would be consistent with its World Trade Organization disciplines.

Suggested Citation

  • Edward J. Balistreri & Russell H. Hillberry, 2021. "21st Century Trade Wars," World Scientific Book Chapters, in: Peter Dixon & Joseph Francois & Dominique van der Mensbrugghe (ed.), POLICY ANALYSIS AND MODELING OF THE GLOBAL ECONOMY A Festschrift Celebrating Thomas Hertel, chapter 9, pages 279-297, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789811233630_0009
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    Cited by:

    1. Bekkers, Eddy & Teh, Robert, 2019. "Potential economic effects of a global trade conflict: Projecting the medium-run effects with the WTO global trade model," WTO Staff Working Papers ERSD-2019-04, World Trade Organization (WTO), Economic Research and Statistics Division.

    More about this item

    Keywords

    Computable General Equilibrium Modeling; CGE Models; Trade Policy Modeling; GTAP; Global Trade Analysis Project; Trade Impact Assessments; Sustainability Impact Assessments; Trade and Employment; Trade and Climate; Globalization; Preferential Trade Agreements; Thomas Hertel;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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