Protectionism During the Crisis Had Minimal Impact on the Global Trade Collapse

(World Bank)

Since the global financial crisis began, many countries have raised tariffs on selected products. But there hasn’t been a widespread increase in protectionism via tariff policies, according to a new working paper by Hiau Looi Kee, Cristina Neagu, and Alessandro Nicita. In fact, using new World Bank estimates that summarize trade policies in a wide range of countries from 2008 to 2009, the authors show that only a handful of countries, including Malawi, Russia, Argentina, Turkey, and China, raised tariffs on frequently-traded products. Some economies, such as the U.S. and the EU, have not used tariffs but instead mainly relied on anti-dumping duties. In the worst-case scenario, the rise in tariffs and anti-dumping duties may have driven down trade by about US$43 billion, or less than 2% of the global trade collapse between 2008 and 2009.

Download the World Bank Policy Research Working Paper 5274.