Template-Type: ReDIF-Paper 1.0
Author-Name: Hongyan Zhao
Author-X-Name-First: Hongyan
Author-X-Name-Last: Zhao
Title: Assessing the macroeconomic impacts of the 2025 US tariffs
Abstract: This paper develops a multi-country, multi-sector trade model with input-output linkages to analyze the global macroeconomic effects of the United States'(US) 2025 tariff policies. The model incorporates endogenous labor supply and captures the transmission of tariff-induced shocks through global value chains (GVCs). By simulating both short-run and long-run adjustments, the analysis demonstrates how trade shocks are amplified by sectoral interdependence and labor market dynamics. The results reveal substantial short-run output losses and inflationary pressures, especially for economies deeply integrated into US supply chains, while long-run reallocations partially mitigate-but do not fully offset-these impacts.
Creation-Date: 2025-12
File-URL: https://www.bis.org/publ/work1316.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1316.htm
File-Format: text/html
Number: 1316
Keywords: tariffs, global supply chains, inflation, output, trade war
Classification-JEL: F13, F41, E31, C68
Handle: RePEc:bis:biswps:1316