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.
22%
4%
15%
30%
24%
4%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
29%
39%
28%
4%
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.
22%
2%
0%
4%
43%
26%
2%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
7%
56%
33%
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.
22%
2%
0%
20%
26%
28%
2%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
34%
22%
40%
5%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Franklin Allen |
Imperial College London | Bio/Vote History | ||
|
Very difficult to say. There is so much uncertainty at each step. If the US matches VAT and tariffs, there may well be a significant effect on quantities so it's possible deficits will be reduced.
|
||||
 Pol Antras |
Harvard | Bio/Vote History | ||
|
Not too clear, but if it does because of capital flight, it won't be great news.
|
||||
 Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
|
The trade deficit is the mirror image of saving-investment imbalance + US is at full employment, hence inflation and/or $ appreciation in the pipe.
|
||||
 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
|
conclusion is more general: Tariffs on any sort have limited effects on the trade balance.
|
||||
 Richard William Blundell |
University College London | Bio/Vote History | ||
|
|
||||
 Maristella Botticini |
Bocconi | Bio/Vote History | ||
|
|
||||
 Elena Carletti |
Bocconi | Bio/Vote History | ||
|
|
||||
 Jean-Pierre Danthine |
Paris School of Economics | Did Not Answer | Bio/Vote History | |
|
|
||||
 Paul De Grauwe |
LSE | Bio/Vote History | ||
|
|
||||
 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
|
|
||||
 Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
|
|
||||
 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
|
|
||||
 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
|
|
||||
 Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
|
|
||||
 Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
|
|
||||
 Rachel Griffith |
University of Manchester | Bio/Vote History | ||
|
|
||||
 Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
|
|
||||
 Sergei Guriev |
London Business School | Bio/Vote History | ||
|
|
||||
 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
|
|
||||
 Beata Javorcik |
University of Oxford | Bio/Vote History | ||
|
|
||||
 Botond Kőszegi |
Central European University | Did Not Answer | Bio/Vote History | |
|
|
||||
 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
|
|
||||
 Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
|
|
||||
 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
|
Tariffs do not address the cause of the US trade deficit and are likely to have little impact on it. For an excellent and easy to understand explanation see FT article by Obstfeld below.
-see background information here -see background information here |
||||
 Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
|
|
||||
 Costas Meghir |
Yale | Bio/Vote History | ||
|
|
||||
 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
|
|
||||
 Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
|
It would likely reduce the U.S. trade deficit, but it would not necessarily be good for U.S. consumers or firms.
|
||||
 Richard Portes |
London Business School | Bio/Vote History | ||
|
The deficit is a macroeconomic phenomenon: I + G - S. Tariffs might raise S if they depress consumer spending, but not by much. They won’t contribute enough revenue to move the dial. They might reduce I - but the claim is that they will raise I.
|
||||
 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Carol Propper |
Imperial College London | Did Not Answer | Bio/Vote History | |
|
|
||||
 Imran Rasul |
University College London | Did Not Answer | Bio/Vote History | |
|
|
||||
 Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
|
|
||||
 Ricardo Reis |
London School of Economics | Did Not Answer | Bio/Vote History | |
|
|
||||
 Rafael Repullo |
CEMFI | Bio/Vote History | ||
|
|
||||
 Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
|
|
||||
 Antoinette Schoar |
MIT | Bio/Vote History | ||
|
|
||||
 Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
|
It depends. If increased US tariffs do not trigger changes in foreign tariffs, the trade deficit would fall because foreign goods prices increase in the U.S. But if foreign tariffs also increase as a result, then effects are ambiguous because U.S. exports will also fall
|
||||
 Daniel Sturm |
London School of Economics | Bio/Vote History | ||
|
|
||||
 Silvana Tenreyro |
LSE | Bio/Vote History | ||
|
|
||||
 Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
|
The best way to curb the deficit is for the US to save more and for deficit vis a vis the US countries to spend more.
|
||||
 John Vickers |
Oxford | Bio/Vote History | ||
|
X-M = (S-I ) + (T-G)
|
||||
 Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
|
many goods not being produced by the US any more. unclear how much intermediates etc. can be reduced
|
||||
 Karl Whelan |
University College Dublin | Bio/Vote History | ||
|
Trade balances are determined by macro factors like the imbalance between income and spending and the exchange rate. And even if you think tariffs work through relative prices effects, reciprical tariffs will undo the impact on this.
|
||||
 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
|
|
||||
Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
Franklin Allen |
Imperial College London | Bio/Vote History | ||
|
That's what many people think. On the other hand, giving in to a bully is often not a good strategy.
|
||||
|
Pol Antras |
Harvard | Bio/Vote History | ||
|
It does not always work, but it has worked in the past.
|
||||
|
Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
|
Would work for a rational government.
|
||||
|
Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
|
reciprocal tariffs will not lead the Trump administration to decrease their own. And they may lead it to double down.
|
||||
|
Richard William Blundell |
University College London | Bio/Vote History | ||
|
|
||||
|
Maristella Botticini |
Bocconi | Bio/Vote History | ||
|
|
||||
|
Elena Carletti |
Bocconi | Bio/Vote History | ||
|
|
||||
|
Jean-Pierre Danthine |
Paris School of Economics | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Paul De Grauwe |
LSE | Bio/Vote History | ||
|
|
||||
|
Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
|
|
||||
|
Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
|
|
||||
|
Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
|
|
||||
|
Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Rachel Griffith |
University of Manchester | Bio/Vote History | ||
|
|
||||
|
Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
|
|
||||
|
Sergei Guriev |
London Business School | Bio/Vote History | ||
|
|
||||
|
Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
|
|
||||
|
Beata Javorcik |
University of Oxford | Bio/Vote History | ||
|
|
||||
|
Botond Kőszegi |
Central European University | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
|
Under standard conditions of political decision making, I would agree with the statement - but the current administration seems to follow a different script in which a trade war may be the desired outcome.
|
||||
|
Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Christian Leuz |
Chicago Booth | Bio/Vote History | ||
|
Answer obviously depends on the rationality of the players & the credibility of the threat. But if the retaliatory response is targeted in a way that it becomes credible, it should lower the probability. See evidence for EU retaliatory threats to 2002 US steel safeguards below.
-see background information here |
||||
|
Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
|
|
||||
|
Costas Meghir |
Yale | Bio/Vote History | ||
|
|
||||
|
Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
|
|
||||
|
Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Richard Portes |
London Business School | Bio/Vote History | ||
|
|
||||
|
Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Carol Propper |
Imperial College London | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Imran Rasul |
University College London | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Ricardo Reis |
London School of Economics | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Rafael Repullo |
CEMFI | Bio/Vote History | ||
|
|
||||
|
Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Antoinette Schoar |
MIT | Bio/Vote History | ||
|
|
||||
|
Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
|
|
||||
|
Daniel Sturm |
London School of Economics | Bio/Vote History | ||
|
|
||||
|
Silvana Tenreyro |
LSE | Bio/Vote History | ||
|
|
||||
|
Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
|
|
||||
|
John Vickers |
Oxford | Bio/Vote History | ||
|
|
||||
|
Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
|
not sure if this is meant to be a philosophical statement or an assertion of fact in the current situation. it surely "depends" on many things.
|
||||
|
Karl Whelan |
University College Dublin | Bio/Vote History | ||
|
In a sane world yes. In the world where Trump is US President, who knows?
|
||||
|
Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
|
Trump is obviously sensitive to retaliation.
|
||||
Question C Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
Franklin Allen |
Imperial College London | Bio/Vote History | ||
|
Again very difficult to say. Depends how the US retaliates. It could on the targeted goods or unilaterally. A better way forward may be to try and trade more with the rest of the world by signing more free trade deals.
|
||||
|
Pol Antras |
Harvard | Bio/Vote History | ||
|
If we ignore the political reasons for doing so, the economic impact of retaliation would be negative in most cases.
|
||||
|
Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
|
Important to target tariffs on those goods and services with significant demand elasticity (hence possible substitution, not gas for instance).
|
||||
|
Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
|
complex, depending on the nature of the countermeasures, including export restrictions. A general reciprocal tariff probably makes you even worse off.
|
||||
|
Richard William Blundell |
University College London | Bio/Vote History | ||
|
|
||||
|
Maristella Botticini |
Bocconi | Bio/Vote History | ||
|
|
||||
|
Elena Carletti |
Bocconi | Bio/Vote History | ||
|
|
||||
|
Jean-Pierre Danthine |
Paris School of Economics | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Paul De Grauwe |
LSE | Bio/Vote History | ||
|
|
||||
|
Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
|
|
||||
|
Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
|
|
||||
|
Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
|
|
||||
|
Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Rachel Griffith |
University of Manchester | Bio/Vote History | ||
|
|
||||
|
Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
|
|
||||
|
Sergei Guriev |
London Business School | Bio/Vote History | ||
|
|
||||
|
Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
|
|
||||
|
Beata Javorcik |
University of Oxford | Bio/Vote History | ||
|
|
||||
|
Botond Kőszegi |
Central European University | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
|
Targeted retaliatory tariffs are likely to mobilize more inner protest in the US than otherwise.
|
||||
|
Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Christian Leuz |
Chicago Booth | Bio/Vote History | ||
|
Plenty of evidence that retaliation will make things worse for all economies involved (see estimates below). Definitely in short-run but also lasting neg effects. The problem of not responding is that it might invite future tariffs. Responding country faces prisoners dilemma.
-see background information here -see background information here -see background information here -see background information here -see background information here |
||||
|
Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
|
|
||||
|
Costas Meghir |
Yale | Bio/Vote History | ||
|
|
||||
|
Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
|
|
||||
|
Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
|
By imposing retaliatory tariffs, you hurt your own consumers, but you keep the retaliation threat credible. Short run vs long run effects.
|
||||
|
Richard Portes |
London Business School | Bio/Vote History | ||
|
|
||||
|
Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Carol Propper |
Imperial College London | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Imran Rasul |
University College London | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Ricardo Reis |
London School of Economics | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Rafael Repullo |
CEMFI | Bio/Vote History | ||
|
|
||||
|
Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Antoinette Schoar |
MIT | Bio/Vote History | ||
|
|
||||
|
Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
|
|
||||
|
Daniel Sturm |
London School of Economics | Bio/Vote History | ||
|
While a simple trade model suggest that unilateral free trade is optimal (i.e. no retaliation), this is a repeated game where effective punishments will be key.
|
||||
|
Silvana Tenreyro |
LSE | Bio/Vote History | ||
|
|
||||
|
Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
|
|
||||
|
John Vickers |
Oxford | Bio/Vote History | ||
|
|
||||
|
Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
|
standard textbook says no; in real life - a bit more uncertain, unclear how much
|
||||
|
Karl Whelan |
University College Dublin | Bio/Vote History | ||
|
There are unlikely to be any winners in a global trade war.
|
||||
|
Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
|
Retaliation is useful as a tool to deter Trump but carrying it out carries welfare costs.
|
||||
