We estimate the elasticities of exports to tariffs and to the real exchange rate within the same specification, allowing for a direct comparison.We find that tariffs have significantly more impact on exports than the real exchange rate, invalidating the symmetry assumption often made in macroeconomic models.From the point of view of short-term stabilization, tariffs and monetary policy can be considered as partly substitutes.Monetary policy is more stabilizing due to its internal transmission channels; at the zero lower bound, though, there is an incentive to use tariffs for macroeconomic stabilization.In normal times, a governement will more likely react to a trade "agression" through monetary rather than through trade retaliation.

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We estimate the elasticities of exports to tariffs and to the real exchange rate within the same specification, allowing for a direct comparison.We find that tariffs have significantly more impact on exports than the real exchange rate, invalidating the symmetry assumption often made in macroeconomic models.From the point of view of short-term stabilization, tariffs and monetary policy can be considered as partly substitutes.Monetary policy is more stabilizing due to its internal transmission channels; at the zero lower bound, though, there is an incentive to use tariffs for macroeconomic stabilization.In normal times, a governement will more likely react to a trade "agression" through monetary rather than through trade retaliation.

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