tariffs ; retaliation ; tariff wars ; heterogeneous firms ; World Trade Organization ; Nash equilibrium …

negotiations? And what would happen to trade policy cooperation if the world trading system had a different institutional design …

blocs. We hold that to maintain logical consistency in a world of symmetric trading blocs, an individual bloc should act on … world as a whole as assumed by Krugman, and show that Krugman's seemingly innocuous choice of the world price of a given … schedule is monotonically decreasing in our relative bloc size, and that the world welfare increases with our new relative bloc …