Tariffs - What Do They Achieve?

An episode of the The Week That Was in Europe podcast, hosted by Klaus Adam and Dirk Schumacher, titled "Tariffs - What Do They Achieve?" was published on February 7, 2025 and runs 21 minutes.

February 7, 2025 ·21m · The Week That Was in Europe

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Summary

We discuss the effects of tariffs on consumers and producers, drawing on evidence from the tariff war during the first Trump administration. The empirical evidence shows that import tariffs led to increases in domestic prices, reductions in import quantities and a reduction in product variety. This coupled with additional adverse effects on global supply chains and retaliatory tariffs makes it hard to understand how the U.S. can gain in economic terms from tariffs. We draw our insights from this academic paper: Amiti, Weinstein, Redding: "The Impact of the 2018 Tariffs on Prices and Welfare" https://www.aeaweb.org/articles?id=10.1257/jep.33.4.187

Episode Description

We discuss the effects of tariffs on consumers and producers, drawing on evidence from the tariff war during the first Trump administration.

The empirical evidence shows that import tariffs led to increases in domestic prices, reductions in import quantities and a reduction in product variety. This coupled with additional adverse effects on global supply chains and retaliatory tariffs makes it hard to understand how the U.S. can gain in economic terms from tariffs.

We draw our insights from this academic paper:

Amiti, Weinstein, Redding: "The Impact of the 2018 Tariffs on Prices and Welfare"

https://www.aeaweb.org/articles?id=10.1257/jep.33.4.187