Question A:
A baseline US tariff of 10% on all European imported goods would have substantially damaging economic consequences for many countries in Europe.
Responses
Responses weighted by each expert's confidence
Question B:
Rather than responding to threatened tariffs with retaliatory measures, unilaterally opening EU markets to US exports would deliver better outcomes for European industry.
Responses
Responses weighted by each expert's confidence
Question C:
Disruptions to global supply chains from new tariffs and trade wars will lead to measurably slower global growth over the next five years.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
 Franklin Allen |
Imperial College London | Bio/Vote History | ||
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A 10% tariff is probably damaging but it's uncertain whether it would substantially damaging. This is especially true in the long run as they firms take mitigating actions.
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 Pol Antras |
Harvard | Bio/Vote History | ||
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Substantial is a bit vague, but for some sectors, a 10% US tariff can create substantial negative effects.
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 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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the effects would depend very much on the degree to which the tariffs are offset by a euro depreciation
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 Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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 Maristella Botticini |
Bocconi | Bio/Vote History | ||
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 Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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The damage depends on whether the 10% tariff is the same for all US imports, or whether it varies across supplier countries.
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 Elena Carletti |
Bocconi | Did Not Answer | Bio/Vote History | |
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 Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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It seems to me that it would depend very much on the evolution of the dollar
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 Paul De Grauwe |
LSE | Bio/Vote History | ||
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 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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 Xavier Freixas |
Barcelona GSE | Bio/Vote History | ||
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 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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 Luis Garicano |
LSE | Bio/Vote History | ||
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 Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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 Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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 Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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 Luigi Guiso |
Einaudi Institute for Economics and Finance | Did Not Answer | Bio/Vote History | |
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 Sergei Guriev |
Sciences Po | Bio/Vote History | ||
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 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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But a uniform tariff is likely less damaging than targetted measures would be. Exchange rate movements could offset much.
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 Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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 Botond Kőszegi |
Central European University | Bio/Vote History | ||
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 Eliana La Ferrara |
Harvard Kennedy | Bio/Vote History | ||
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 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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 Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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While the increase from the current average MFN to 10% is not trivial, the US is rarely a major destination for EU countries/industries, which will dampen the macro-level effect.
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 Costas Meghir |
Yale | Bio/Vote History | ||
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 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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 Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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 Richard Portes |
London Business School | Bio/Vote History | ||
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I’m assuming it wouldn’t be just Europe. So USD up, maybe not 10%, but enough to mitigate effects on European exports. And if no rise in US S-I, then US current account doesn’t change, US aggregate imports don’t change much.
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 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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 Carol Propper |
Imperial College London | Bio/Vote History | ||
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It would be damaging for Germany and that would be damaging for other European countries.
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 Imran Rasul |
University College London | Bio/Vote History | ||
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 Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
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 Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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Economic damage to the US may well be greater.
-see background information here |
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 Rafael Repullo |
CEMFI | Bio/Vote History | ||
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 Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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 Antoinette Schoar |
MIT | Bio/Vote History | ||
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 Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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 Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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 Silvana Tenreyro |
LSE | Bio/Vote History | ||
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 Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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 John Vickers |
Oxford | Bio/Vote History | ||
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The effects, including for exchange rates, depend on what US tariffs apply to rest of world. The question doesn’t specify that.
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 Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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 Karl Whelan |
University College Dublin | Did Not Answer | Bio/Vote History | |
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 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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It's difficult to say without knowing what the US reaction would be to retaliation and to opening markets to US firms. If opening markets to US firms leads to trade deficits with the US, will the US remove the tariff? Similarly with imposing a tariff on US firms.
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Pol Antras |
Harvard | Bio/Vote History | ||
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I know it is somewhat counterintuitive, but the EU would gain much from not escalating and selling itself as an economic area in which one can do business without capricious policy disruptions.
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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i think the structure of the game is a prisoner's dilemma. Once the US puts tariffs, it is very likely that the best response is to do the same.
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Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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Maristella Botticini |
Bocconi | Bio/Vote History | ||
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Elena Carletti |
Bocconi | Did Not Answer | Bio/Vote History | |
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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In principle I lean in favor of this statement modulo the fact that not excluding some, notably agricultural, products from this unilateral opening is likely to create havoc rather than better outcomes
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Xavier Freixas |
Barcelona GSE | Bio/Vote History | ||
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The issue may be industry specific. In some industries it may be better to retaliate, in others to provide open access to US exports
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Luis Garicano |
LSE | Bio/Vote History | ||
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This is a transactional president. If he thinks he can dominate Europe, he will. ultimately, that will be worse for European industry.
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Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Did Not Answer | Bio/Vote History | |
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Sergei Guriev |
Sciences Po | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Unilateral tariff elimination might have merits, but not effective as a retaliation. It is not clear, though, that retaliatory tariffs would be the most effectively response for promoting future global prosperity.
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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This is a ceteris-paribus statement. But in reality there will be a sequence of actions, and whether or not to retaliate will have an impact on next round tariff decisions in the US.
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Bio/Vote History | ||
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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From a pure economic perspective, it would likely be better not to respond. Retaliatory tariffs also have negative consequences for the country that imposes them. However, there are complicated strategic and long-run economic considerations that make the answer uncertain
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Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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In a world where countries (or firms located within) have market power, unilateral opening in response to your partner raising its tariffs is rarely an optimal response (not even mentioning the internal political economy issues).
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Costas Meghir |
Yale | Bio/Vote History | ||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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Richard Portes |
London Business School | Bio/Vote History | ||
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They are fairly open now.
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Carol Propper |
Imperial College London | Bio/Vote History | ||
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Imran Rasul |
University College London | Bio/Vote History | ||
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Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
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Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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Depends on industry by industry, overall maybe yes.
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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Retaliation does not make sense in terms of economics, but the political economy is different.
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Silvana Tenreyro |
LSE | Bio/Vote History | ||
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The answer depends, amongst other factors, on whether potential tariffs are permanent or temporary. From EU's perspective, a limited and more selective retaliation might be less damaging than a blanket-all sectors retaliation.
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Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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Retaliation would be unwise but negotiation could make sense
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Karl Whelan |
University College Dublin | Did Not Answer | Bio/Vote History | |
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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It would be good for consumers but likely to hurt some specific industries.
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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There may well be damage to growth. This is true in the short run but particularly in the long run if competition is reduced and innovation is reduced as a result.
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Pol Antras |
Harvard | Bio/Vote History | ||
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I am not so sure about the effects on the long-run growth rate, but yes, the short-run negative impact will affect overall economic growth over the next five years.
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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leaving aside the permanent efficiency losses from less trade, the reallocation implied by the tariffs is likely to have substantial adverse effects in the short run
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Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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Maristella Botticini |
Bocconi | Bio/Vote History | ||
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Elena Carletti |
Bocconi | Did Not Answer | Bio/Vote History | |
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Xavier Freixas |
Barcelona GSE | Bio/Vote History | ||
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Luis Garicano |
LSE | Bio/Vote History | ||
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Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Did Not Answer | Bio/Vote History | |
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Sergei Guriev |
Sciences Po | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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I tend to agree, but I also believe that the overall effect may be small, due to the re-organization of supply chains.
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Bio/Vote History | ||
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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DOI: 10.1257/aer.20211519
-see background information here |
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Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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Costas Meghir |
Yale | Bio/Vote History | ||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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Richard Portes |
London Business School | Bio/Vote History | ||
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If retaliation spiral, then effects on trade will be significant, and experience of early 1930s becomes relevant.
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Carol Propper |
Imperial College London | Bio/Vote History | ||
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Imran Rasul |
University College London | Bio/Vote History | ||
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Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
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Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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Silvana Tenreyro |
LSE | Bio/Vote History | ||
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I would expect growth with tariffs and trade disruptions to be lower than without. The projections for the next 5 years are very strong to start with. Tariffs will detract from that high baseline.
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Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Karl Whelan |
University College Dublin | Did Not Answer | Bio/Vote History | |
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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