Question A:
Matching US import tariffs to the tariffs, value-added taxes and non-tariff barriers imposed on US goods by other countries would substantially reduce the US trade deficit.
Responses
© 2025. Kent A. Clark Center for Global Markets.
9%
4%
15%
26%
43%
2%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
25%
33%
41%
1%
0%
Question B:
The threat of retaliation against the imposition of higher tariffs on a country’s exports substantially lowers the probability of a trade war.
Responses
© 2025. Kent A. Clark Center for Global Markets.
9%
2%
2%
15%
39%
30%
2%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
4%
20%
43%
29%
4%
Question C:
In the event that the threat of retaliation does not deter the imposition of tariffs, the economies of countries subject to higher tariffs on their exports would be measurably better off by responding with targeted tariffs on imports from the first mover.
Responses
© 2025. Kent A. Clark Center for Global Markets.
9%
2%
2%
17%
48%
22%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
4%
21%
47%
28%
0%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
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Trade deficit is closely linked to macroeconomic factors, especially savings shortfall. Even banning imports from certain countries wouldn't remove these macroeconomic factors.
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 Mark Aguiar |
Princeton | Bio/Vote History | ||
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Bio/Vote History | ||
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 Dirk Bergemann |
Yale | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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 Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Edward Glaeser |
Harvard | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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It is hard to say because trade patterns are complex, with imported goods being inputs for exported goods.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Erik Hurst |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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No long-run impact unless the capital surplus is similarly reduced
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
 Pete Klenow |
Stanford | Bio/Vote History | ||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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My understanding is that US tariffs (pre-Trump) do not differ greatly from those imposed by other countries against the US. So, such a policy change would have little effect.
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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 Parag Pathak |
MIT | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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The direct effect is likely be to reduce imports, but there are too many moving parts, endogenous reactions, and general equilibrium effects to be confident of the net effect.
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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Note first that it takes enormous economic illiteracy, or perhaps acute dyscalculia, to believe that value-added taxes distort trade. If tariffs are high enough, the budget deficit could diminish substantially, in part because the ensuing recession would depress the deficit.
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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 Fiona Scott Morton |
Yale | Bio/Vote History | ||
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 Carl Shapiro |
Berkeley | Bio/Vote History | ||
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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If the policy is expected to be temporary, then I would expect this is true. For permanent policies, high tariffs are will reduce trade but may not impact trade balance due to movements in exchange rates.
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 Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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 James Stock |
Harvard | Bio/Vote History | ||
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 Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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 Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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It will reduce the total amount of trade; unclear what it does to the difference between flows in each direction
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 Richard Thaler |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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 Ivan Werning |
MIT | Bio/Vote History | ||
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Economic theory explains trade deficits mainly from savings decisions not directly affected by permanent tariffs (temporary tariffs that are expected to revert could lower deficits temporarily). Basic empirical evidence is supportive of these conclusions.
-see background information here |
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Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
Daron Acemoglu |
MIT | Bio/Vote History | ||
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Threats could also be the cause of a trade war.
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Mark Aguiar |
Princeton | Bio/Vote History | ||
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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But seemingly not enough at present. The main thing that seems to reduce Trump's appetite for a trade war is the adverse stock market reaction.
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Dirk Bergemann |
Yale | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Judith Chevalier |
Yale | Bio/Vote History | ||
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With rational actors....
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David Cutler |
Harvard | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Edward Glaeser |
Harvard | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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I do not understand the wording of this statement. If the statement is that fear of retaliation makes countries less likely to impose tariffs, then yes, I agree.
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Oliver Hart |
Harvard | Bio/Vote History | ||
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I would generally say yes, but with a mercurial person like Trump in charge, whose decisions do not seem to be based on any principles that I can discern, the answer is probably no.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Erik Hurst |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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This depends on what the other countries infer from the threat. Their belief in a future trade war may increase, leading them to think they have an advantage if they go first. It also allows them to prepare. The impact of threats is quite uncertain.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Too many other factors to make a blanket prediction
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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It is hard to tell how much the Trump tariffs and other countries' reaction to them are motivated by economic reasoning. And, if economics is not are the forefront, then it's difficult to gauge how likely a trade war is.
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Depends on credibility of the threat and the importance of the trade partner as an export destination.
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Parag Pathak |
MIT | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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This was once the conventional wisdom, but current US policy reflects no inhibitions in starting trade wars.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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We are living a counterexample. Canada, China, and Mexico threatened to retaliate, but that did not deter Trump. It might have deterred a rational actor.
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Fiona Scott Morton |
Yale | Bio/Vote History | ||
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Answer is specific to the current president
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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A trade war by definition involves one country raising tariffs and other countries retaliating with higher tariffs. Without retaliation, there it isn't a trade war. So while threatening retaliation may avoid the initial tariff increase, it has to raise the risk of a trade war
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Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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James Stock |
Harvard | Bio/Vote History | ||
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Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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Current trade wars seem to have more to do with the personalities of the politicians involved.
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Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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MAD theory requires rational actors. Not clear all actors here are rational. In fact it is clear they all are not.
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Richard Thaler |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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Ivan Werning |
MIT | Bio/Vote History | ||
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In standard trade theory, tariffs are unilaterally optimal for large countries to manipulate world prices in their favor. Retaliation changes this calculus, lowering the incentive to raise tariffs. But policy makers may have additional motives or think tariffs work differently,
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Question C Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
Daron Acemoglu |
MIT | Bio/Vote History | ||
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Mark Aguiar |
Princeton | Bio/Vote History | ||
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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In theory, this makes them worse off still. In practice, this may be necessary to discipline the first mover.
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Dirk Bergemann |
Yale | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Judith Chevalier |
Yale | Bio/Vote History | ||
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David Cutler |
Harvard | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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While responding to tariffs with tariffs does not directly improve economic performance, it can be strategically rational in a tit-for-tat sense.
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Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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It is important to deter further beggar-thy-neighbor tariffs by the first mover.
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Edward Glaeser |
Harvard | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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It depends on which goods the retaliatory tariffs target and on whether they succeed in inflicting damage on the first mover.
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Tariffs introduce a wedge between marginal utility and marginal cost and so unless a country can affect world prices they reduce that country's welfare even if other countries have tariffs. However, reciprocation may make sense as a long-run strategy to to deter future tariffs.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Erik Hurst |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Raises the domestic inflation and so could limit the central bank's ability to offset the initial hit to income from the first mover.
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Depends on if it hastens an end to the trade war.
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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If there have to be tariffs, better that they should be narrowly focused.
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Targeted means less harmful for the retaliating country, more painful for its trade-war adversary, and can be beneficial if they bring the trade war to an end.
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Parag Pathak |
MIT | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
|
Again the direct effect is clear, and as stated in the question, but there are too many knock-on effects to be sure of the net outcome.
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||||
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José Scheinkman |
Columbia University | Bio/Vote History | ||
|
In static analysis, countries would be better off by not retaliating, but dynamically, this could invite further tariffs in a country's exports. So the best strategy is to choose carefully the products to use when retaliating, to establish a reputation.
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||||
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Fiona Scott Morton |
Yale | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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The best argument for implementing retaliatory tariffs is that they will lead to a bilateral reduction in tariffs, which would make both countries better off. If this fails, then retaliatory tariffs are unlikely in practice to be beneficial to either country.
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Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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James Stock |
Harvard | Bio/Vote History | ||
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Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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It's hard to see exactly what this question is asking. Is there a well-reasoned, empirically robust model of how trade wars evolve?
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Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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In almost all cases, retaliation will make the retaliator worse off (although this applies to the people, not the leadership. Perhaps the leadership gets a rush from being in a fight).
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Ivan Werning |
MIT | Bio/Vote History | ||
|
Absent deterrence (+ further retaliation from 1st mover), countries can choose optimal tariffs unilaterally optimally. By standard arguments, as long as they are not price takers, a positive tariff is optimal. For many countries this tariff and benefit is likely small, however.
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