A well-known proposition in conventional trade theory, H. G. Johnson (1951-52), is that the maximum revenue tariff exceeds the optimum welfare tariff. The purpose of this paper is to show that under oligopoly the optimum welfare tariff may exceed the maximum revenue tariff due to the...

This paper analyzes trade wars and the sustainability of free trade in the J. A. Brander and B. J. Spencer (1985) model of profit-shifting export subsidies. It is shown that both countries will usually be worse-off if there is a trade war than under free trade but that one country may be...