What is the best single measure of a country’s import tariffs? As we know, countries don’t have a single tariff, but a landscape of tariffs and other trade barriers. For comparison purposes, it is useful to distill the array of tariffs down to a single number.
In terms of tariffs, there are two common ones: the simple average Most Favored Nation (MFN) applied tariff and the weighted average MFN applied tariff. (MFN is the tariff that WTO members and other favored partners receive.) Neither is perfect.
Much has been written on the escalation of the trade dispute. What hasn’t been discussed is what will be the impact on developing nations who rely on trade as an engine of economic growth for ending poverty.
As tariffs are beginning to be imposed, my team analyzed the impact of these new tariffs and the potential for tariff escalation in developing countries in a new World Bank working document. We found that the new trade tariffs will depress bilateral trade, disrupt global supply chains, and increase demand for substitutes from developing countries.
The Belt and Road Initiative (BRI) is an ambitious effort to deepen regional cooperation and improve connectivity on a trans-continental scale. While the scope of the initiative is still taking shape, the BRI consists primarily of the Silk Road Economic Belt, linking China to Central and South Asia and onwards to Europe, and the New Maritime Silk Road, linking China to the nations of South East Asia, the Gulf Countries, North Africa, and on to Europe. Six other economic corridors have been identified to link other countries to the Belt and the Road.