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The Impact of Retaliatory Tariffs on Agricultural and Food Trade

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  • Colin A. Carter
  • Sandro Steinbach

Abstract

This paper analyzes the short-run trade effects of retaliatory tariffs against agriculture and food exports from the United States. The results indicate that these tariffs caused a substantial decline in U.S. agriculture and food exports and induced a reorientation of international trade patterns. We find that losses in foreign trade with retaliatory countries outweigh the gains from trade with non-retaliatory countries by more than USD 14.4 billion. Our results also indicate that non-retaliatory countries accommodated the increased demand from retaliatory countries by reorienting their trade relationships. We find that countries in South America and Europe benefited the most from these adjustments gaining more than USD 13.5 billion in additional foreign sales. The effects of retaliatory tariff increases across products vary substantially, with soybeans and meat products experiencing the most considerable redistribution effects.

Suggested Citation

  • Colin A. Carter & Sandro Steinbach, 2020. "The Impact of Retaliatory Tariffs on Agricultural and Food Trade," NBER Working Papers 27147, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27147
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    1. Alberto Cavallo & Gita Gopinath & Brent Neiman & Jenny Tang, 2021. "Tariff Pass-Through at the Border and at the Store: Evidence from US Trade Policy," American Economic Review: Insights, American Economic Association, vol. 3(1), pages 19-34, March.
    2. Michael E. Waugh, 2019. "The Consumption Response to Trade Shocks: Evidence from the US-China Trade War," NBER Working Papers 26353, National Bureau of Economic Research, Inc.
    3. Sergio Correia & Paulo Guimarães & Tom Zylkin, 2020. "Fast Poisson estimation with high-dimensional fixed effects," Stata Journal, StataCorp LP, vol. 20(1), pages 95-115, March.
    4. Mike Waugh, 2019. "The Consumption Response to Trade Shocks," 2019 Meeting Papers 1226, Society for Economic Dynamics.
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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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