New methodology reveals potential impact of detailed tariff cuts on trade.
Import tariffs are usually very detailed and can affect trade negotiations. A new method was developed to combine detailed tariff information with trade models. By using this method, researchers found that when tariff cuts are applied at a very detailed level, the overall impact on trade can vary depending on how consumers switch between different products. This means that even if only a few products have high tariffs, they can significantly affect the overall tariff for a group of products.