A CGE-Model Analysis of U.S. Imposed Automotive Tariffs

Authors

Angela Li, University of Toronto SchoolsFollow

Abstract

Using a computable generable equilibrium (CGE) model, this research paper evaluates the effects of a U.S. imposed 25% automotive import tariff on NAFTA countries and the European Union, the greatest U.S. automotive trade partners. Three simulations were conducted: the implementation of tariffs with no retaliation, equivalent retaliation on the same products, and retaliation on the top exports of politically significant states, with sensitivity analysis applied in the final scenario. The results demonstrate that the EU is marginally affected while the NAFTA countries experience the greatest increases in prices and reduction in total wages.

Recommended Citation

Li, Angela (2018) "A CGE-Model Analysis of U.S. Imposed Automotive Tariffs," Undergraduate Economic Review: Vol. 15: Iss. 1, Article 14.
Available at: https://digitalcommons.iwu.edu/uer/vol15/iss1/14