This study tries to present a theoretical explanation of the tariff reduction paradox: starting from a high tariff environment, governments may, under some circumstances, negotiate to reduce tariffs, but without eliminating them altogether. It is found that under certain circumstances tariffs...

On March 2018, the Trump administration introduced 25 percent tariffs on steel and 10 percent tariffs on aluminum imports. To minimize the adverse effects of these tariffs to downstream US producers who import these products, the exclusion request that grants tariff exemptions has been also...

Cross-section and time-series data show that nations substitute income taxes for tariffs as they develop. This paper confronts this observation within the context of a two-country open-economy endogenous growth model in which public expenditure is financed by an optimal tariff and income tax the...

The authors extend Professor Bhagwati's analysis about the nonequivalence between trade policy instruments when domestic production is monopolized and the terms of trade are endogenous, by allowing for smuggling. They show that the dominance of the ad valorem tariff over the quota is not robust....

When consumers purchase imported products through cross-border e-commerce (CBEC), they actually pay for “product + import tariff”. In practice, import tariffs include ad valorem tariff and specific tariff, where the former is levied based on the price of the product, and the latter is levied...

Developing countries have been facing substantial adjustment costs in their endeavor in implementing trade reform. To lessen the adjustment costs of trade reform and to diffuse political support for protection a uniform tariff policy has often been recommended. The present paper examines the...

Normative economics is concerned with making welfare judgments about policies and economic events. This chapter discusses government policies. In the case of trade theory, commercial policy-normative economics embraces the study of the welfare consequences of various events when policies are...

The theory of production and trade is motivated in large part by the effects of tariffs on wages. General equilibrium models that examine these effects include constant costs, factor proportions, specific factors, imperfect competition and noncompetitive factor market. The present paper reviews...

The normative analysis of monopolistic competition models of trade suggests that even for a small country a small tariff is welfare improving [Gros (1987) and Helpman and Krugman (1989, ch. 7)]. This note introduces a consumption-leisure trade-off to endogenize labor supply resulting in...