More from the Author

• Case | HBS Case Collection | February 2019 (Revised June 2019)

  India: State Capacity and Unity in Diversity

  Alberto Cavallo, Matthew Weinzierl and Robert Scherf

  As 2018 drew to a close, India prepared to once again carry out the largest democratic exercise in human history, as in less than six months more than 850 million eligible voters would have the chance to choose their representatives to the Lok Sabha—the country’s lower house of parliament—and, thus, their country’s Prime Minister and cabinet. The election would pit the ruling party—the Bharatiya Janata Party (Indian People’s Party, known as the BJP) led by Prime Minister Narendra Modi—against a collection of parties that included the once-dominant Indian National Congress party (Congress). The 2019 elections would serve as a referendum on Modi’s first term in office and, therefore, on a high stakes question: had India’s implausibly robust democracy produced the right leader for the right moment, or had it taken the wrong path?

  Keywords: Political Elections; Government and Politics; Leadership; Public Opinion; India;

  Citation:

  Cavallo, Alberto, Matthew Weinzierl, and Robert Scherf. "India: State Capacity and Unity in Diversity." Harvard Business School Case 719-061, February 2019. (Revised June 2019.)  View Details

  CiteView DetailsEducatorsPurchase

  Related

• Mimeo | 2019

  Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy

  Alberto Cavallo, Gita Gopinath, Brent Neiman and Jenny Tang

  We use data collected at the border and at retailers to characterize the impact of recent changes in US trade policy on importers, consumers, and exporters. We start by studying the tariffs on imports of steel and Chinese goods that were imposed during 2018. We find little difference in the "at-the-dock" ex-tariff price levels and stickiness for otherwise equivalent goods that were affected and not affected. This nearly complete passthrough of tariffs to the total price paid by importers suggests the tariff incidence has fallen largely on the US. We simultaneously estimate exchange rate passthrough and find the response to be far more muted. Next, in-progress analyses of retail prices preliminarily show more heterogeneity, with the higher cost of imports passed through to consumers for some goods, such as washing machines, but absorbed by lower retailer profit margins for others, such as many from China. Finally, in contrast to imports, US exports subjected to retaliatory tariffs exhibited declines in their ex-tariff prices relative to equivalent but non-targeted goods.

  Keywords: Trade; Policy; Change; Outcome or Result; China; United States;

  Citation:

  Cavallo, Alberto, Gita Gopinath, Brent Neiman, and Jenny Tang. "Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy." June 2019. Mimeo. (Preliminary.)  View Details

  CiteView Details Read Now

  Related

• Case | HBS Case Collection | February 2019 (Revised May 2019)

  The U.S. – China Trade War

  Alberto Cavallo, Mariana Cal and Anne Laski

  On December 1, 2018, U.S. President Donald Trump and China’s Leader Xi Jinping faced each other across a dinner table during a G20 meeting in Buenos Aires, Argentina. After what Trump called an “amazing and productive meeting,” the two leaders announced a truce in the ongoing trade war between their countries, following months of accusations, tariffs, and mounting retaliation. The U.S. agreed to postpone for 90 days an increase from 10% to 25% in tariffs applied to a large number of Chinese goods, which had been initially scheduled for January 1, 2019. In exchange, the White House announced that China would purchase a “very substantial” amount of agricultural and other products from the United States, adding that it expected the two nations “to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services, and agriculture.” The Chinese government simply stated that it was “willing to expand imports according to the needs of the domestic market” and that it hoped to “reach a concrete agreement on mutual benefit and win-win as soon as possible." Despite Trump’s assurances that China was sending “very strong signals” after the meeting, the outcome of the negotiations was highly uncertain. Would China provide enough concessions to satisfy the demands of the U.S.? Would the U.S. back down? Or would the trade war escalate, causing unprecedented disruptions—and opportunities—in global trade patterns?

  Keywords: Trade War; Trump; current account; NAFTA; balance of payments; Intellectual Property Protection; Trade; Macroeconomics; Economic Slowdown and Stagnation; International Relations; United States; China;

  Citation:

  Cavallo, Alberto, Mariana Cal, and Anne Laski. "The U.S. – China Trade War." Harvard Business School Case 719-034, February 2019. (Revised May 2019.)  View Details

  CiteView DetailsEducatorsPurchase

  Related