How Trump’s steel and aluminium tariff shapes future world trade
April 18, 2019·
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0 min read
Krisna Gupta
Bayu Sutjiatmo
Muhamad Kurniawan
BookAbstract
In this information era where globalization and advancement of technology helps reduce trade cost, Trump just proposed his idea of having a tariff to help The United States’ steel and aluminium industry. Many pro-free trade economists still argue that the policy will hurt world trade. The cost can be so high; Australia, Japan, and European Union are trying to get exemption from the tariff. We show there is terms of trade gain for implementing import tax for a big player such as the United States of America (USA). This turns into a tit-for-tat game, which the best response for the rest of the world is to retaliate. In turn, WTO’s role turns questionable and international trade gets harder to predict. Furthermore, we provide theoretical explanation why this will hurt the world as a whole.
Type
Publication
Routledge
Authors
Lecturer
My name is Krisna, some call me Imed. I am an advisor at the Indonesian National Economic Council. My research is about trade and investment policy and how it affects Indonesian firms. I use some structured equation such as GTAP model, but also do some empirics like gravity models.
I lecture at Universitas Indonesia. Additionally, I assume a senior fellow position at Center for Indonesian Policy Studies.
I contributed to several projects with Bank Indonesia, Bappenas, ADB, Prospera, and ERIA, among others. Occasional oped writer, typically at Kompas, Jakarta Post and East Asia Forum. Please see CV or contact me for more information.