Trade wars could lead to 63% tariffs, costing governments billions.
The study looked at how high tariffs should be, what tariffs would be in a global trade war, and the costs of countries not cooperating on trade policies. They found that optimal tariffs are around 62%, trade war tariffs would be about 63%, and countries could lose about 2.9% of their welfare if they stop cooperating on trade. On the other hand, future trade negotiations could lead to welfare gains of around 0.5%.