Trade barriers have nonlinear effects, impacting low- and medium-tariff trade flows.
Trade policies like tariffs and nontariff barriers have different effects on international trade than previously thought. By using a new method, researchers found that these policies have nonlinear impacts, especially for low- and medium-tariff trade. This means that changes in trade policies can have a bigger impact than expected, especially when considering both tariffs and nontariff barriers together. In simpler terms, trade policies can have a bigger effect on trade flows than we thought, especially when looking at the whole picture.