Re Tariffs, the results from that paper seem surprising to me (that a US trade war would make almost all other countries better off then the status quo). Since export tariffs are a thing, If we invert the agency here, this says that if we were to solve the coordination problem (and Coase says there’s a deal to be made, even for Canada) export+import tariffs of 10% applied universally on goods destined to/sourced from the United States (+60% for Chinese goods) would be a net win for everyone ex-US and raise substantial tax money that could be used to offset other taxes further increasing the benefits. That would seem to be a rational choice, EU/BRICS etc. should perhaps get on that.
At least in this model, universal sanctions of this type targeting the US would make the sanctioning countries better off; not a usual argument I hear around the economic impacts of sanctions. Is the US somehow unusual here or are sanctions against say Iran or Russia potentially making the rest of the world richer (at the cost of even greater harm to those countries [win-win from a sanctions perspective])?
Given the usual arguments around the benefits of free trade, this is a really surprising result. Assuming there’s any actual legitimacy to this model I have many questions on the optimal game theory implications.
Re Tariffs, the results from that paper seem surprising to me (that a US trade war would make almost all other countries better off then the status quo). Since export tariffs are a thing, If we invert the agency here, this says that if we were to solve the coordination problem (and Coase says there’s a deal to be made, even for Canada) export+import tariffs of 10% applied universally on goods destined to/sourced from the United States (+60% for Chinese goods) would be a net win for everyone ex-US and raise substantial tax money that could be used to offset other taxes further increasing the benefits. That would seem to be a rational choice, EU/BRICS etc. should perhaps get on that.
At least in this model, universal sanctions of this type targeting the US would make the sanctioning countries better off; not a usual argument I hear around the economic impacts of sanctions. Is the US somehow unusual here or are sanctions against say Iran or Russia potentially making the rest of the world richer (at the cost of even greater harm to those countries [win-win from a sanctions perspective])?
Given the usual arguments around the benefits of free trade, this is a really surprising result. Assuming there’s any actual legitimacy to this model I have many questions on the optimal game theory implications.