GTAP Resources: Resource Display
| GTAP Resource #7727 |
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"The potential economic consequences of the return of protectionism: the US example" Authors: Guimbard, Houssein Abstract This paper analyzes the trade policy shocks implemented under the second Trump administration from January 2025 to March 2026. Combining a detailed institutional analysis of the legal instruments deployed—Section 232, IEEPA, Section 122, Section 301, and negotiated framework deals—with quantitative simulations using a global computable general equilibrium model, the paper assesses the macroeconomic and sectoral consequences of alternative tariff configurations. Five scenarios are simulated: (i) a Section 232-only regime; (ii) the post-IEEPA March 2026 architecture combining Section 232 and Section 122; (iii) the November 2025 hybrid regime combining Section 232, IEEPA, and framework deals; (iv) a prospective Section 301 overcapacity scenario in which targeted partners face an additional 25 pp surcharge on non-Section 232 products; and (v) the Liberation Day peak scenario, capturing the April 2025 IEEPA tariff regime at its most restrictive before any framework deals. Results indicate that all scenarios generate significant welfare losses for the United States and its trading partners, with U.S. GDP declining by 0.37 to 1.28% and world GDP by 0.26 to 0.62%. Targeted Section 301 tariffs produce substantial trade diversion beneficiaries (Canada +2.86%), while broad-based tariff configurations generate near-universal losses. The design of the tariff instrument (its coverage breadth and partner targeting) matters as much as the average tariff level for distributional outcomes. |
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- Multilateral trade negotiations - Preferential trading arrangements - Partial and general equilibrium models - North America |
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Public Access  GTAP Resource 7727 (619.8 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions Draft. Please do not quote (or ask me before). Title of the paper may change. |
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Last Modified: 4/15/2026 11:27:11 AM
