IMF Working Papers

Retaliation through Temporary Trade Barriers

By Davide Furceri, Jonathan David Ostry, Chris Papageorgiou, Pauline Wibaux

May 12, 2023

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Davide Furceri, Jonathan David Ostry, Chris Papageorgiou, and Pauline Wibaux. Retaliation through Temporary Trade Barriers, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Are Temporary Trade Barriers (TTBs) introduced for strategic reasons? To answer this question, we construct a novel sectoral measure of retaliation using daily bilateral data on TTB responses in 1220 subsectors across a panel of 25 advanced and emerging market economies over 1989-2019. Stylized facts and econometric analysis suggest that within-year responses are more important in terms of intensity and frequency than commonly understood from the existing literature, which has tended to ignore them. We find that retaliation often consists of responses across many sectors and that same-sector retaliation is far from being the norm. In addition, we find that larger countries tend to retaliate more, and that retaliation is larger during periods of higher unemployment and when the trading partner targeted a domestic comparative advantage sector.

Keywords: Antidumping, Protectionism, Temporary Trade Barriers, Trade retaliation

Publication Details

  • Pages:

    46

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2023/099

  • Stock No:

    WPIEA2023099

  • ISBN:

    9798400241109

  • ISSN:

    1018-5941