{"title":"Trade wars and rumors of trade wars: The dynamic effects of the U.S.–China tariff hikes","authors":"Trang Hoang, Carter Mix","doi":"10.1016/j.jinteco.2026.104229","DOIUrl":"10.1016/j.jinteco.2026.104229","url":null,"abstract":"<div><div>We use a general equilibrium dynamic trade model to study the effects of the U.S.–China tariff hikes on the global economy. Our model captures key trade patterns since the tariff hikes, such as the pace of the decline in U.S.–China bilateral trade and the reallocation of global imports from the U.S. toward China. The welfare losses from the tariff hikes are much larger in our dynamic model than implied by static trade models. Expectations about the persistence of the tariff hikes shape aggregate dynamics in the short to medium run.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"160 ","pages":"Article 104229"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147397621","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Services trade and the choice of online versus in-person delivery","authors":"Sarah Oliver","doi":"10.1016/j.jinteco.2026.104211","DOIUrl":"10.1016/j.jinteco.2026.104211","url":null,"abstract":"<div><div>Trade in services is unique from goods trade in that the trade cost associated with services exports depends on whether the service is delivered in-person (via travel of producer or consumer) or remotely (via the internet). Building on the trade-in-task framework of Grossman and Rossi-Hansberg (2008), this paper develops a task-based model of services trade that explains choice of delivering intermediate services tasks to customers in foreign markets either in-person or over the internet. To test the predictions of the empirical model, I isolate average trade costs for 23 U.S. services sectors, and consider the contribution of internet technology, travel costs, and the share of employees in each sector in occupations that can only be performed in-person to total trade costs. I find that U.S. services exporters with a higher concentration of in-person only employees face significantly higher trade costs than those with employees more concentrated in occupations that can be performed online, particularly during the COVID-19 pandemic and for professional services sectors.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"160 ","pages":"Article 104211"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145979953","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Globalization and structural transformation: The role of tradable services","authors":"Sang Min Lee","doi":"10.1016/j.jinteco.2026.104220","DOIUrl":"10.1016/j.jinteco.2026.104220","url":null,"abstract":"<div><div>This paper studies how globalization impacts structural transformation from goods to services. I construct a multi-country, multi-sector model in which the transformation occurs through changes in income, prices, comparative advantage, or input-output linkages. I parameterize it with data from 1995 to 2018 for 66 countries covering diverse stages of economic development. Decomposition exercises show that globalization outweighs productivity growth in shaping structural transformation and that globalization’s impact primarily operates through comparative advantage. Counterfactual exercises reveal globalization’s heterogeneous impact on countries’ structural transformation. I characterize the underlying factor behind this result: Globalization affected countries’ transformation to the extent that it altered their comparative advantage. In countries with sector-neutral globalization—where export trade costs relative to import trade costs changed at similar rates for goods and services—comparative advantage and structural transformation were minimally impacted. In countries with sector-biased globalization, the transformation accelerated when the globalization shifted comparative advantage toward services, but decelerated otherwise.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"160 ","pages":"Article 104220"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147397616","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Firm and labor adjustments to FDI liberalization","authors":"Ming-Jen Lin , Yi-Ting Wang , Sung-Ju Wu","doi":"10.1016/j.jinteco.2026.104227","DOIUrl":"10.1016/j.jinteco.2026.104227","url":null,"abstract":"<div><div>This paper studies how liberalizing outward foreign direct investments affects manufacturers’ engagement in global production and their domestic workers’ labor market outcomes. Focusing on a liberalization policy in 2001 by the government of Taiwan that allowed 122 electronic products to be produced in China, we estimate its effect on Taiwanese electronic manufacturers and their domestic workers. Employing a matched difference-in-differences strategy, we find that the manufacturers targeted by the policy were on average 10% more likely to invest in China relative to the non-targeted ones. Correspondingly, the domestic incumbent workers of the targeted manufacturers were on average more likely to change their jobs, remain employed for fewer years, and have lower wages in subsequent years relative to those employed by the non-targeted ones. The worker-level effects of the policy exhibited substantial heterogeneity across the initial wage distribution, with top-decile workers being less affected and the remaining workers experiencing average losses.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"160 ","pages":"Article 104227"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147397618","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Intersectoral demand linkages: Good shocks, bad outcomes?","authors":"Kristian Behrens , Sergei Kichko , Philip Ushchev","doi":"10.1016/j.jinteco.2026.104226","DOIUrl":"10.1016/j.jinteco.2026.104226","url":null,"abstract":"<div><div>When and how are sector-specific price shocks magnified or dampened in general equilibrium with multiple industries and distortions? We develop a general framework with homothetic sectoral preferences and derive a welfare multiplier, which is a sufficient statistic for the share of the direct effect of the shock that materializes in the aggregate. We show that the combination of Cobb–Douglas or CES preferences with monopolistic competition always yields welfare gains from a positive shock. However, a positive sectoral shock may lead to aggregate losses under departures from either CES preferences or monopolistic competition. While our approach is similar to Baqaee and Fahri (2019, 2024), shocks propagate via consumer preferences in our case and production networks in their case, and market structure plays an explicit role in the transmission of shocks in our model.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"160 ","pages":"Article 104226"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147397619","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Knowledge diffusion through FDI: Worldwide firm-level evidence","authors":"JaeBin Ahn, Chan Kim, Nan Li, Andrea Manera","doi":"10.1016/j.jinteco.2025.104205","DOIUrl":"10.1016/j.jinteco.2025.104205","url":null,"abstract":"<div><div>This paper examines how foreign direct investment (FDI) affects cross-border knowledge diffusion by linking firm-level FDI events to patent citations. We assemble a global panel that merges utility patents with project-level greenfield and M&A investments in 60 countries over two decades. Using a new local-projection difference-in-differences methodology, we find that FDI raises bidirectional citation flows between investor and hosts, with stronger effects for greenfield than for M&A. Spillovers are heterogeneous—larger where host absorptive capacity is higher and where investor–host technologies are closer. At the country–industry level, diffusion extends beyond the targeted sector, propagating to technologically related industries and along production input–output linkages. Mode of entry matters: greenfield projects generate robust intra- and inter-industry diffusion, whereas M&A exhibits limited horizontal effects but notable forward (downstream) spillovers consistent with learning-by-using.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"160 ","pages":"Article 104205"},"PeriodicalIF":4.0,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145979952","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Simon J. Bolz , Fabrice Naumann , Philipp M. Richter
{"title":"Unilateral environmental policy and offshoring","authors":"Simon J. Bolz , Fabrice Naumann , Philipp M. Richter","doi":"10.1016/j.jinteco.2025.104185","DOIUrl":"10.1016/j.jinteco.2025.104185","url":null,"abstract":"<div><div>This paper examines how offshoring shapes emissions leakage and global emissions in response to unilateral environmental policy. We use a general equilibrium offshoring model with heterogeneous firms, based on standard modeling assumptions, where firms allocate labor between production tasks and emissions abatement. We find that global emissions respond non-monotonically to a unilateral emissions tax increase: for small cross-country tax differentials, emissions fall; but as the difference widens, leakage exceeds 100%, raising global emissions due to a global technique effect. The cleanest domestic firms start offshoring and incumbent offshoring firms become dirtier under declining effective foreign taxes. We isolate the offshoring margin – one underexplored channel of leakage – and contrast our findings with comparable models of trade in final goods: the mode of globalization matters. Complementing the unilateral reform with a border carbon adjustment (BCA) prevents emissions leakage but may raise inequality between countries.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"159 ","pages":"Article 104185"},"PeriodicalIF":4.0,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145570140","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Commercial rivalry as seller incidence shifting: Non-parametric accounting of the China shock","authors":"James E. Anderson","doi":"10.1016/j.jinteco.2025.104208","DOIUrl":"10.1016/j.jinteco.2025.104208","url":null,"abstract":"<div><div>Intense US–China commercial rivalry is quantified in this paper with novel non-parametric relative resistance sufficient statistics. China’s manufacturing seller incidence falls (seller price rises) 8.2% yearly as China’s sales share quadruples over 2000-14. US seller incidence rises 6.3% yearly as US sales share halves. A 10% rise in US (China) 2014 sales share reduces seller incidence 10.05% (9.74%) and raises average seller incidence of others. Trade elasticities very close to one fit trade shares to revealed relative resistances. Trade elasticities identified off variation in observable buyer prices or trade costs are biased upward by omitted variation in unobservable buyer frictions.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"159 ","pages":"Article 104208"},"PeriodicalIF":4.0,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145880567","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Export agriculture and rural poverty: Evidence from Indonesian palm oil","authors":"Ryan B. Edwards","doi":"10.1016/j.jinteco.2025.104209","DOIUrl":"10.1016/j.jinteco.2025.104209","url":null,"abstract":"<div><div>This paper measures the impacts of Indonesia’s palm oil export expansion on district poverty and household expenditure from 2002 to 2015. Identification exploits geographic variation in agro-climatic suitability in a long difference instrumental variable framework. The main result is that a 10 percentage point increase in district area under cultivation for oil palm corresponds to around six percentage points faster poverty reduction and nine percent faster expenditure growth. The expenditure gains are principally explained by rising returns to agricultural labor. I find no evidence of labor reallocation across sectors: new farmland absorbed labor saved from palm adoption. The expansion increased local government revenues, spending and public goods, while increasing deforestation, forest fires, certain health problems and conflict. Indonesian palm oil thus provides a striking modern illustration of some of the trade-offs inherent in large changes in trade and land use.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"159 ","pages":"Article 104209"},"PeriodicalIF":4.0,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145924515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Kathryn Baragwanath , Gordon Hanson , Amit K. Khandelwal , Chen Liu , Hogeun Park
{"title":"Using satellite imagery to measure the impacts of new highways: An application to India","authors":"Kathryn Baragwanath , Gordon Hanson , Amit K. Khandelwal , Chen Liu , Hogeun Park","doi":"10.1016/j.jinteco.2025.104201","DOIUrl":"10.1016/j.jinteco.2025.104201","url":null,"abstract":"<div><div>This paper integrates daytime and nighttime satellite imagery into a spatial general-equilibrium model to evaluate the returns to investments in new motorways. Our approach has particular value in developing-country settings in which spatially granular economic data are scarce. To demonstrate our method, we use publicly available imagery to evaluate India’s road construction projects in the early 2000s. Estimating the model and evaluating welfare impacts only requires remotely-sensed data. We find that India’s road investments improved aggregate welfare, particularly for the largest and smallest urban markets. Welfare gains were unevenly distributed across space, with the Golden Quadrilateral disproportionately benefiting large, already connected markets, while national highway upgrades delivered greater gains to smaller, more remote locations. More generally, within-district variation explains a large share of the overall spatial variance in welfare changes during this period, underscoring the value of high-resolution satellite imagery for capturing localized economic effects.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"159 ","pages":"Article 104201"},"PeriodicalIF":4.0,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145836617","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}