Trade Wars: The Likely Trade and Economic Impact So Far

Abstract

This study quantifies the trade and economic impacts of the tariff measures taken to date in the main salvoes of the trade wars unleashed by unilateral US tariff measures imposed on steel and aluminum pursuant to the Department of Commerce Section 232 National Security Investigation, on imports from China, pursuant to a Section 301 investigation of China’s practices in respect of intellectual property, and threatened tariffs on the automotive sector pursuant to a still-ongoing Section 232 National Security Investigation into “Imports of Automobiles, including Cars, SUVs, Vans and Light Trucks, and Automotive Parts. The simulations take into account the announced retaliation against these US measures by its trading partners. The simulations do not take into account the announced United States-Mexico Trade Agreement that would replace the North American Free Trade Agreement and would likely exempt Mexico from any imposition of auto tariffs and provide Mexico a quota on steel and aluminum exports to the United States as a quid-pro-quo for reducing Mexico’s role in production for the US market.