Search the site
The Trump administration's newly announced trade tariffs are set to reshape global economic dynamics, affecting supply chains, trade relationships, and market stability. As countries respond with countermeasures, industries worldwide brace for disruptions, with potential consequences for growth, inflation, and international cooperation. VoxEU explores the far-reaching economic impacts of these tariffs, analysing their implications for businesses, policymakers, and global trade.
Tariffs cannot fund the government: Evidence from tariff Laffer curves
Until the late 19th century, states raised most of their government revenues from import tariffs. Simon Evenett and Marc-Andreas Muendler ask whether the practice could work today. A side effect of taxes is that they discourage the economic activity that they are assessed on. Tariffs are taxes on imports and no different: they shrink trade.
Jean-Pierre Landau
Ṣebnem Kalemli-Özcan Can Soylu Muhammed A. Yıldırım 27 Apr 2025
The authors develop a novel framework to study the interaction between monetary policy and trade to show that the net impact of tariffs on domestic inflation, output, employment, and the dollar depends on the endogenous monetary policy response in both the tariff-imposing and tariff-exposed countries, within a global general equilibrium framework.
