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Tariff Reciprocity

Author

Listed:
  • James Anderson

    (Boston College)

  • Yoto Yotov

    (School of Economics, Drexel University)

Abstract

U.S. President Trump's emphasis on 'tariff reciprocity' has focused public attention on relative height of tariffs as a measure of fairness in trade relations. The import weighted average tariff subsequently used by USTR to rank how protectionist are trading partners is atheoretic and misleading for this purpose. We propose and implement a theory-consistent tariff index that combines thousands of tariff rates into an import volume equivalent uniform tariff. The index: (i) is consistent with the WTO principle that trade relations should aim at reciprocal exchange of market access, and (ii) decomposes neatly into each country's buyer and seller incidence of tariffs.

Suggested Citation

  • James Anderson & Yoto Yotov, 2025. "Tariff Reciprocity," Working Papers 202526, Center for Global Policy Analysis, LeBow College of Business, Drexel University.
    • Handle: RePEc:drx:wpaper:202526
    as

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    File URL: https://www.lebow.drexel.edu/sites/default/files/2025-05/202526-cgpa-tariff-reciprocity.pdf
    File Function: First version, 2025
    Download Restriction: no
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    More about this item

    Keywords

    Reciprocal Tariffs; Trade Policy; Gravity Theory; Tariff Incidence;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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