and yet some escalation would actually be positive, or else the threats (and actions) will get worse. That's how bullies operate.
We (@julianhi.nz @ckhead.bsky.social @schularick.bsky.social & I. Méjean) made this point in July, and it only got worse since then:
www.kielinstitut.de/publications...
Thank you for coming, Christian. Any great session on export promotion ought to have you included!
Service Offshoring and Export Experience url: academic.oup.com/ej/article-a...
Experienced exporters are more likely to source services at destination. Once offshoring, they exhibit reduced volatility and are less likely to exit foreign markets.
@gberlingieri.bsky.social
Chart of short-run changes in real production under different tariff scenarios for Germany, France, Brazil, Mexico, Canada, the US and the EU. The US administration’s latest threat to impose sweeping new tariffs on many of its closest allies signals a renewed embrace of aggressive unilateralism and misunderstood economics. This column argues that the only effective response is a coordinated one. Unified retaliation by a coalition of like-minded countries made up of the EU, Canada, Mexico, Brazil, and South Korea – which together account for more than 50% of all US goods exports – would be impossible for Washington to ignore and would send a powerful message that the rules-based global trading system is worth defending.
J Hinz, @schularick.bsky.social, @ckhead.bsky.social, I Mejean, & @emanuelornelas.bsky.social argue the only effective response to Trump's #tariffs is a united one. Unified retaliation by the EU, Canada, Mexico, Brazil, & South Korea would be impossible to ignore.
cepr.org/voxeu/column...
#EconSky
Let’s not lose sight of the big picture. Appeasement won’t work. Instead of rushing to minimize short-term costs, we should stick to WTO principles and pursue a coordinated, proportional, multi-country retaliatory response against rule-breakers
A picture is (sometimes) worth just as the paper:
An example of the intricate consequences of a trade war between large countries (and this was the “mild” trade war of 2018-2020…)
"This study estimates the carbon-efficient forest cover in the Brazilian Amazon. A $10/ton carbon tax could preserve 95% of the efficient carbon stock, avoiding 42B tons of CO2 & yielding $1.6T in welfare gains."
From @araujocrrafael.bsky.social , @franciscocosta.bsky.social & Sant'Anna
#EconSky 👇
We find that Brazilian regions specialized in industries targeted by China’s retaliatory tariffs toward the US did experience a relative increase in formal employment & wage bills b/w 2016 and 2021. But there was no effect on the regions more exposed to US tariffs on China.
Trump justifies his protectionist policies as “the quickest way to bring our jobs back to our country.” We show that the first US–China trade war indeed created jobs — in Brazil.
