U.S.-EU banana war: Implications of retaliatory tariffs on Pecorino cheese

Vahe Heboyan, Glenn C.W. Ames, James E. Epperson

Research output: Contribution to journalArticle

Abstract

Because of the European Union's failure to adhere to the dispute settlement panel's findings in the banana dispute, the United States imposed prohibitive tariffs (100% ad valorem) on imports of selected EU products, including Pecorino cheese, as a retaliatory trade policy permitted under WTO rules. This paper illustrates the economic impact of U.S. retaliatory policy. The estimated loss in consumer surplus for Pecorino cheese users was $4.96 million per year. As a result of U.S. policy, tariff revenue and deadweight loss were $1.86 and $3.10 million, respectively. Italian producers lost an estimated $8.55 million in revenue due to reduced exports to the United States, nearly twice the welfare loss experienced by U.S. consumers.

Original languageEnglish (US)
Pages (from-to)53-69
Number of pages17
JournalJournal of Euromarketing
Volume11
Issue number3
DOIs
StatePublished - Dec 1 2002
Externally publishedYes

Keywords

  • Economic impact
  • U.S. countervailing duties
  • WTO

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Marketing

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