Focusing on the United States, the seminar will explore how domestic political incentives and institutions can affect tariff persistence and the resilience of rules-based trade.
Why did US tariffs beginning in 2018 persist, spread and appear to shift in motivation over time? This paper examines the US trade war through the lens of domestic political economy and multilateral rules. Using a new tariff dataset, I establish that US tariffs since 2018 have favoured sectors with high lobbying capacity, and over time, shifted from being negatively to positively associated with inverse export supply elasticities. To explain these dynamics, I develop a model in which a large country faces a time-varying political support motive for protection under a rules-based trade regime. Governments can deviate within the regime or abandon it altogether, drifting towards unilateral policy and possibly trading long-run welfare for short-run political gains. The model delivers a threshold beyond which exit from rules is seen as desirable. An implication is that the resilience of trade rules depends on policies that raise or lower this threshold.
Speaker Biography: Sam Hardwick is a PhD candidate in the Arndt–Corden Department of Economics at the Crawford School of Public Policy, The Australian National University. His research focuses on trade, supply chains and geopolitical risk, with particular attention to the multilateral trading system. He was previously an adviser on trade and investment policy at the Department of the Prime Minister and Cabinet and a data analyst at the Department of Climate Change, Energy, the Environment and Water.
