Using perfectly competitive, general equilibrium models of international trade, specific import tariffs, specific export taxes, and ad valorem trade taxes are compared in a trade war. A trade war is modelled as a NE in trade policies, where each country can choose to use ad valorem trade taxes...

In the Eaton and Grossman Quarterly Journal of Economics, 101 (1986), pp. 383-406 model of export taxes under Bertrand duopoly, it is shown that welfare in the Nash equilibrium in export taxes is always higher than welfare under free trade for both countries