How Does Trade Respond to Anticipated Tariff Changes ? Evidence from NAFTA (English)

Firms anticipate upcoming tariff changes by shifting their purchases to periods with lower costs. This paper shows that such anticipatory dynamics overstate the trade elasticity. Standard identification of the trade response to trade cost changes uses tariff variation from free trade agreements and assumes that trade flows equal their consumption. However, free trade agreements eliminate tariffs gradually through announced phaseouts. This allows firms...

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Author

Khan,Shafaat Yar;

Khederlarian,Armen;
Document Date
2021/04/29
Document Type
Policy Research Working Paper
Report Number
WPS9646
Volume No
1
Total Volume(s)
1
Country
World,
Region
Other,
Disclosure Date
2021/04/29
Disclosure Status
Disclosed
Doc Name
How Does Trade Respond to Anticipated Tariff Changes ? Evidence from NAFTA
Keywords
consumption

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Citation

Khan,Shafaat Yar; Khederlarian,Armen.

How Does Trade Respond to Anticipated Tariff Changes ? Evidence from NAFTA (English). Policy Research working paper|no. WPS 9646 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/377051619701752842

How Does Trade Respond to Anticipated Tariff Changes ? Evidence from NAFTA (English)

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