The Economic Implications of Tariff Increases

Paulson, Caroline M.; Poduri, Aditi; Singh, Aayush; Ulate, Mauricio

Journal Article

The Economic Implications of Tariff Increases

Abstract: Trade policy in the United States has been in flux in recent months. A theoretical analysis of recent increases in U.S. tariffs, including potential retaliatory tariffs by other countries, suggests a resulting drop in overall U.S. employment, although manufacturing employment increases. Results also indicate a decline in overall real income for the United States of around 0.4%, although this number masks important variation across U.S. states.