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The paper examines the impact of tariffs on goods-market search frictions using a dynamic general equilibrium model that includes heterogeneous exporters and retailers. It finds that search frictions significantly affect optimal tariff levels and welfare outcomes, leading to lower unilateral tariffs and attenuated welfare gains compared to models without such frictions. The authors calibrate their model using U.S. and Chinese data from 2016, demonstrating that optimal tariffs are about 20 percentage points

Author

anhle.526102140513

Language

EN