Trade scenario: Employment implications in Europe of a large increase in global tariffs

Abstract:

Protectionism is on the rise. This scenario estimates the potential impact of a significant increase in tariffs in the world’s major trading blocs.

The analysis is carried out using the E3ME macroeconometric model, which provides information on sectoral impacts, together with the Warwick Labor Market Extension model for occupational analysis. Further analysis of the employment developments in Europe is undertaken using Eurofound's European Jobs Monitor.

As predicted by economic theory, tariffs do impact negatively on both GDP and employment. The most negative impact is in the blocs that have a trade surplus. The EU-wide decline in GDP translates to a 0.3% fall in employment in the EU28 by 2030 compared to the baseline.

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Official

Future of Manufacturing in Europe (FOME) https://www.eurofound.europa.eu/observatories/emcc/fome

EU Eurofound: News, 14/03/2019: EU, China, US will suffer economically from the re-emergence of protectionism https://www.eurofound.europa.eu/news/news-articles/eu-china-us-will-suffer-economically-from-the-re-emergence-of-protectionism

EU Eurofound: News, 15/03/2019: Netherlands, Hungary, Germany stand to lose out most in Europe from global economic protectionism https://www.eurofound.europa.eu/news/news-articles/netherlands-hungary-germany-stand-to-lose-out-most-in-europe-from-global-economic-protectionism

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