AVE Tariffs are a Misleading Measure of Tariff Policy

For excellent RA work, we thank Bowen Jiang, Jueming Li, Pengzhen Li, and Thomas Verville. We also thank Miguel Acosta, Treb Allen, Costas Arkolakis, Andy Bernard, Lydia Cox, Rafael Dix-Carneiro, Klaus Desmet, Dave Donaldson, Teresa Fort, Matt Grant, Gordon Hanson, Irene Iodice, Doug Irwin, Amit Khandelwal, Chris Meissner, Emanuel Ornelas, Ralph Ossa, Nina Pavcnik, Maria Ptashinka, John Romalis, Martin Rotemberg, Georg Schaur, Peter Schott, Bob Staiger, Claudia Steinwender, Felix Tintelnot, Sharon Traiberman, David Weinstein, Gerald Willman, and Kei-Mu Yi for helpful discussions on this project, as well as seminar and conference participants at the Columbia University & NYU international trade workshop, the Cowles Conference on International Trade, Dartmouth College, Duke University, North Carolina State University, Purdue University, Macquarie University, Southern Methodist University, University of Houston, Université Laval, the 2023 CESifo Global Economy Conference, the Fall 2022 Midwest Trade Meetings, the Workshop on Trade Policy and Trade Agreements at Bielefeld University, the 2024 Melbourne Empirical Trade Conference, and the 2025 Southern Economics Association Meetings. We gratefully acknowledge financial support from NSF Award #2314696. A previous version of this paper, now superseded by the current manuscript, was circulated under the title “The GATT vs Inflation: Tokyo Drift.” The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

• October 30, 2025