Wine: The punching bag in trade retaliation

Ridley, William; Luckstead, Jeff; Devadoss, Stephen

doi:10.1016/j.foodpol.2022.102250

Cited by 13 publications

(5 citation statements)

References 58 publications

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“…Third, Republican‐leaning counties received more MFP payments. Our results appear to support our conjecture that the distribution of MFP1 and MFP2 was not equal across counties and that political considerations may have been a factor (Balistreri et al 2020; Carter et al 2020; GAO 2020; Ridley & Devadoss 2022).…”

Section: Introductionsupporting

confidence: 83%

Tariffs, agricultural subsidies, and the 2020 US presidential election

Choi

Lim

2022

American J Agri Economics

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This paper provides evidence on the effects of US and Chinese trade policies on the 2020 US presidential election. In response to a series of US tariffs imposed on Chinese goods, China imposed retaliatory tariffs, especially on US agricultural products, which largely affected Republican-leaning counties. The US government then subsidized US farmers by providing direct payments through the Market Facilitation Program (MFP) to mitigate the Chinese retaliatory tariffs. Using the universe of actual county-level MFP disbursement data, we first document that US agricultural subsidies relative to the Chinese retaliatory tariff exposure were especially higher in solidly Republican counties, implying that Trump allocated rents in exchange for political patronage. Then, we find that US agricultural subsidies outweighed Chinese retaliatory tariffs and led to an increase in the Republican vote share in the 2020 presidential election. Finally, we uncover evidence that China's retaliatory trade policy and US agricultural policy exacerbated political polarization in the US, especially the rural-urban divide.

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Section: Introductionsupporting

confidence: 83%

Tariffs, agricultural subsidies, and the 2020 US presidential election

Choi

Lim

2022

American J Agri Economics

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“…Importantly, these studies do not include bilateral country-pair fixed effects in their econometric specifications. However, recent evidence suggests that elasticity estimates obtained from gravity models that account for bilateral country-pair fixed effects, which control for unobserved heterogeneity in policy variables, as in the current study, tend to be systematically smaller in magnitude than estimates obtained from models that do not include country-pair fixed effects (Boehm et al, 2023;Ridley et al, 2022). 21 For the estimates on the effects of PTA membership, we uncover divergent impacts across the three categories: for beef, a negative and significant estimate, and for pork and poultry, positive (though insignificant) estimates.…”

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confidence: 61%

Impacts of tariffs and NTMs on beef, pork and poultry trade

Ridley,

Luckstead,

Devadoss

2024

J Agricultural Economics

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Though tariffs have declined in recent years, the number of applied non‐tariff measures (NTMs) in meat trade has expanded. We estimate the impacts of tariffs and NTMs (sanitary and phytosanitary [SPS] measures, technical barriers to trade [TBTs], quantitative restrictions, and special safeguard measures) on beef, pork and poultry trade using a structural gravity model. Our baseline regression results show tariffs hinder trade, but SPS measures and TBTs on average expand trade for these three meat products. Using the estimates from our structural gravity model, we simulate the differential effects of declining tariffs versus proliferation of NTMs between 2003 and 2019. The simulation results show that tariff reductions during this period expanded global trade by a cumulative US$466.2 million for the three products, ceteris paribus. In contrast, growth in the number of NTMs caused global meat trade to rise by US$8.4 billion. Our findings thus suggest that the marked increase in the number of applied NTMs in recent decades has had a dramatically larger impact on global meat trade than tariff reductions.

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“…Using industry‐specific tariffs allows us to perform better econometric analysis in a gravity model, which generates theoretically consistent trade elasticities for specific products. Ridley et al (2022) are one of the first to examine the impact of commodity‐specific tariffs on wine trade. Hence, our second contribution is to add dairy tariff analysis to the agricultural trade literature to perform theoretically consistent gravity analysis.…”

Section: Literature Reviewmentioning

confidence: 99%

Determinants of dairy‐product trade: Do subsidies matter?

Kondaridze

Luckstead

2023

J Agricultural Economics

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Given the recent changes in the supply and demand of dairy products, many opportunities arise for exporting and importing countries. This paper examines determinants of dairy‐product trade by applying the Poisson Pseudo‐Maximum Likelihood (PPML) method to the gravity model using panel data on 49 exporting and 235 importing countries for the 17 years from 2000 to 2016. The gravity model is estimated using both interval data and dynamic analyses. The results show that domestic subsidies have a modest, but significant, impact on dairy‐product trade across the models. For example, a 1% increase in subsidies leads to a roughly 0.02% increase in trade for an average country. Memberships in trade agreements, market size factors, and government institutions also positively affect dairy‐product trade. However, tariffs are insignificant in the main model specification. Results from the lag‐policy analysis show that the impact of subsidies disappears after the second year of distribution; whereas for the lead‐policy analysis, results suggest at least 3 years of anticipatory effects on domestic subsidies.

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Wine: The punching bag in trade retaliation

Cited by 13 publications

References 58 publications

Tariffs, agricultural subsidies, and the 2020 US presidential election

Tariffs, agricultural subsidies, and the 2020 US presidential election

Impacts of tariffs and NTMs on beef, pork and poultry trade

Determinants of dairy‐product trade: Do subsidies matter?

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