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International Monetary Fund. Research Dept.
It has been two years since the trade tensions erupted and not only captured policymakers’ but also the research community’s attention. Research has quickly zoomed in on understanding trade war rhetoric, tariff implementation, and economic impacts. The first article in the December 2019 issue sheds light on the consequences of the recent trade barriers.
Mr. Benjamin L Hunt, Susanna Mursula, Mr. Rafael A Portillo, and Marika Santoro

-point increase in U.S. and China bilateral import tariffs: exports in GIMF 6: 10-percentage-point increase in U.S. and China bilateral import tariffs: changes in bilateral exports in GIMF 7: 10-percentage-point increase in U.S. and China bilateral import tariffs: factor reallocation in GTAP 8: 10-percentage-point increase in U.S. and China bilateral import tariffs: terms of trade 9: 10-percentage-point increase in U.S. and China bilateral import tariffs: Changes in bilateral exports in GTAP 10: 10-percentage-point increase in U.S. and China bilateral import tariffs

Mr. Stephen Tokarick

). Apart from possible adverse terms-of-trade effects, aid in the form of an increase in the supply of a factor of production, could also immiserize a recipient country if it has distortions in place. For example, in the context of the standard two-good, two-factor model of international trade, Johnson (1967) showed that in the presence of a tariff, factor accumulation could reduce a country’s real income if it is biased toward production of the tariff-protected good and if it leads to a reduction in the value of output at world prices. Yano and Nugent (1999