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US trade policy in numbers: how exposed is the EU?

Author

Listed:
  • Rita Cappariello

    (Bank of Italy)

  • Michele Mancini

    (Bank of Italy)

Abstract

Amid lingering uncertainty on future US trade policies towards the EU, this study provides an assessment of the implications of a change in US trade tariffs for the EU, with a focus on Italy. By examining trade flows and matching over 5.000 products to effective tariffs, the work quantifies, at the aggregate and sectoral level, actual bilateral average tariffs on trade in final goods and intermediates. Although US goods’ tariffs are generally lower than those imposed by partners, this asymmetry is not as marked for the EU. This study also evaluates the direct and indirect exposure of the EU’s and its major countries’ GDP to alternative scenarios of US tariff hikes. A change in US tariffs would affect around 2.8 per cent of total EU GDP. The EU GDP potentially affected by US tariffs only on automotive imports would be 0.4 per cent while the overall Italian exposure would be just below, 0.3 per cent, around 10 per cent in terms of the value-added produced in the motor vehicles sector.

Suggested Citation

  • Rita Cappariello & Michele Mancini, 2019. "US trade policy in numbers: how exposed is the EU?," Questioni di Economia e Finanza (Occasional Papers) 528, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_528_19
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2019-0528/QEF_528_19.pdf
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    References listed on IDEAS

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    1. Douglas A. Irwin, 2017. "Clashing over Commerce: A History of US Trade Policy," NBER Books, National Bureau of Economic Research, Inc, number irwi-2, July.
    2. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    3. Dani Rodrik, 2018. "What Do Trade Agreements Really Do?," Journal of Economic Perspectives, American Economic Association, vol. 32(2), pages 73-90, Spring.
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    5. Rita Cappariello & Milan Damjanovic & Michele Mancini & Filippo Vergara Caffarelli, 2018. "EU-UK global value chain trade and the indirect costs of Brexit," Questioni di Economia e Finanza (Occasional Papers) 468, Bank of Italy, Economic Research and International Relations Area.
    6. Alessandro Borin & Michele Mancini, 2019. "Measuring What Matters in Global Value Chains and Value-Added Trade," World Bank Publications - Reports 31533, The World Bank Group.
    7. Belotti,Federico & Borin,Alessandro & Mancini,Michele, 2020. "icio : Economic Analysis with Inter-Country Input-Output Tables in Stata," Policy Research Working Paper Series 9156, The World Bank.
    8. Douglas A. Irwin, 2017. "Introduction to "Clashing over Commerce: A History of US Trade Policy"," NBER Chapters, in: Clashing over Commerce: A History of US Trade Policy, pages 1-27, National Bureau of Economic Research, Inc.
    9. Alessandro Borin & Michele Mancini, 2015. "Follow the value added: bilateral gross export accounting," Temi di discussione (Economic working papers) 1026, Bank of Italy, Economic Research and International Relations Area.
    10. Irwin, Douglas A., 2017. "Clashing over Commerce," University of Chicago Press Economics Books, University of Chicago Press, number 9780226398969, September.
    11. Manfred Lenzen & Daniel Moran & Keiichiro Kanemoto & Arne Geschke, 2013. "Building Eora: A Global Multi-Region Input-Output Database At High Country And Sector Resolution," Economic Systems Research, Taylor & Francis Journals, vol. 25(1), pages 20-49, March.
    12. Wen Chen & Bart Los & Philip McCann & Raquel Ortega‐Argilés & Mark Thissen & Frank van Oort, 2018. "The continental divide? Economic exposure to Brexit in regions and countries on both sides of The Channel," Papers in Regional Science, Wiley Blackwell, vol. 97(1), pages 25-54, March.
    13. Rita Cappariello, 2017. "Brexit: estimating tariff costs for EU countries in a new trade regime with the UK," Questioni di Economia e Finanza (Occasional Papers) 381, Bank of Italy, Economic Research and International Relations Area.
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    Cited by:

    1. Pietro Cova & Alessandro Notarpietro & Massimiliano Pisani, 2020. "Protectionism and the effective lower bound in the euro area," Temi di discussione (Economic working papers) 1286, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    tariffs; protectionism; US trade policy;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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    This paper has been announced in the following NEP Reports:

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