This paper characterizes analytically the optimal tariff of a large one-sector economy with monopolistic competition and firm heterogeneity in general equilibrium, thereby extending the small-country results of Demidova and Rodriguez-Clare (JIE, 2009) and the homogeneous firms framework of Gros...

This paper addresses the issue of whether Donald Trump should impose a 35% tariff on the importation of certain goods from China and Mexico, and presumably other countries. Applying utilitarian ethics leads to the conclusion that the tariff should not be imposed. The same result is obtained by...

We examine the impact of the steel tariffs imposed by the United States in 2018. The tariffs were unusual in their size – 25% – and comprehensive coverage. These characteristics, as well as the concentrated nature of the U.S. industry, make the tariffs a useful instrument for measuring...

Historically, tariffs have been an attractive policy tool to protect domestic industries. The benefits of such a policy are based on theoretical models that assume foreign manufacturers sell directly to consumers. However, recent empirical evidence suggests that wholesalers and retailers play an...

This paper rehabilitates the concept of effective rate of protection for use in political economy. The usual definition corresponds to no economically interesting magnitude in general equilibrium. The effective rate of protection for a sector is redefined here as the uniform tariff which is...