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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 across the supply chain
Different modes of retaliation to US tariffs impact economic activity, inflation, and trade, with the effects vary significantly. A broad retaliation strategy targeting both final and intermediate goods would result in a more pronounced contraction in GDP and more persistent inflation than retaliation that targets only final goods.
THE GREAT TRADE HACK
How Trump's trade war fails and global trade moves on
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Richard Baldwin
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.
Jean-Pierre Landau
