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The Nixon Shock after Forty Years: The Import Surcharge Revisited

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  • Douglas A. Irwin

Abstract

On August 15, 1971, President Richard Nixon closed the gold window and imposed a 10 percent surcharge on all dutiable imports in an effort to force other countries to revalue their currencies against the dollar. The import surcharge was lifted four months later after the Smithsonian agreement led to new exchange rate parities. This paper examines the political, economic, and legal issues surrounding the import surcharge. This historical episode may shed light on the possible use of trade sanctions as part of the effort to get China to allow the renminbi to appreciate more rapidly.

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  • Douglas A. Irwin, 2012. "The Nixon Shock after Forty Years: The Import Surcharge Revisited," NBER Working Papers 17749, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:17749
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    1. Caldara, Dario & Iacoviello, Matteo & Molligo, Patrick & Prestipino, Andrea & Raffo, Andrea, 2020. "The economic effects of trade policy uncertainty," Journal of Monetary Economics, Elsevier, vol. 109(C), pages 38-59.
    2. Campbell, Douglas L., 2020. "Relative Prices and Hysteresis: Evidence from US Manufacturing," European Economic Review, Elsevier, vol. 129(C).
    3. Timm Betz & Andrew Kerner, 2016. "The influence of interest: Real US interest rates and bilateral investment treaties," The Review of International Organizations, Springer, vol. 11(4), pages 419-448, December.
    4. Leontyeva, Elena (Леонтьева, Елена) & Narkevich, Sergey (Наркевич, Сергей), 2015. "Optimal Practice of Creation and Management of Gold Reserves [Оптимальная Практика Создания И Управления Золотовалютными Резервами]," Published Papers mak12, Russian Presidential Academy of National Economy and Public Administration.
    5. Christopher Erceg & Andrea Prestipino & Andrea Raffo, 2018. "The Macroeconomic Effect of Trade Policy," 2018 Meeting Papers 221, Society for Economic Dynamics.
    6. G.-Fivos Sargentis & Demetris Koutsoyiannis, 2023. "The Function of Money in Water–Energy–Food and Land Nexus," Land, MDPI, vol. 12(3), pages 1-18, March.
    7. Ahmed Mehedi Nizam, 2023. "An analysis of transnational transfer of wealth through cross-border financial transactions," SN Business & Economics, Springer, vol. 3(1), pages 1-31, January.
    8. Razin, Assaf, 2021. "Globalization and Global Crises: Rest of the World vs. Israel," CEPR Discussion Papers 15643, C.E.P.R. Discussion Papers.
    9. James L. Butkiewicz & Scott Ohlmacher, 2021. "Ending Bretton Woods: evidence from the Nixon tapes," Economic History Review, Economic History Society, vol. 74(4), pages 922-945, November.
    10. Bown,Chad P. & Crowley,Meredith A & Bown,Chad P. & Crowley,Meredith A, 2016. "The empirical landscape of trade policy," Policy Research Working Paper Series 7620, The World Bank.
    11. Nizam, Ahmed Mehedi, 2021. "Redistribution of wealth through cross border financial transactions: A closer look," MPRA Paper 109374, University Library of Munich, Germany.
    12. Lukas Boer & Malte Rieth, 2024. "The Macroeconomic Consequences of Import Tariffs and Trade Policy Uncertainty," Discussion Papers of DIW Berlin 2072, DIW Berlin, German Institute for Economic Research.
    13. G.-Fivos Sargentis & Panos Defteraios & Nikos D. Lagaros & Nikοs Mamassis, 2022. "Values and Costs in History: A Case Study on Estimating the Cost of Hadrianic Aqueduct’s Construction," World, MDPI, vol. 3(2), pages 1-27, April.
    14. Assaf Razin, 2020. "De-globalization: Driven by Global Crises?," NBER Working Papers 27929, National Bureau of Economic Research, Inc.
    15. Assaf Razin, 2021. "Globalization And Global Crises: Israel And The Rest Of The World," Israel Economic Review, Bank of Israel, vol. 19(1), pages 103-134.
    16. Auboin, Marc & Ruta, Michele, 2013. "The relationship between exchange rates and international trade: a literature review," World Trade Review, Cambridge University Press, vol. 12(3), pages 577-605, July.
    17. Douglas L. Campbell, 2013. "Relative Prices, Hysteresis, and the Decline of American Manufacturing," 2013 Papers pca584, Job Market Papers.
    18. Lawrence L. Kreicher & Robert N. McCauley, 2021. "Managing the Dollar Over Its Cycles," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 49(2), pages 143-158, June.
    19. Michael D. Bordo, 2020. "The Imbalances of the Bretton Woods System 1965 to 1973: U.S. Inflation, the Elephant in the Room," Open Economies Review, Springer, vol. 31(1), pages 195-211, February.

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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-

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